Why do students take out loans? In order to pay for college.
Why is college so expensive, with its cost increases running far higher than inflation? Because the government made student loans (and grants) easy to get.
In other words, Inflation Model #1: You throw a bunch of money at what is essentially a static supply, and price of that item will increase to the point of consuming the new money.
I’ve heard that colleges have raised tuition and fees precisely because student loan money is available to pay the increases.
I’ve also heard it’s led to administrative bloat at some colleges, what with hiring more administrators and staff who don’t really contribute to the actual education of students.