Years ago I worked in the student loan dept. of a regular bank. Clerks spent all their time sending out payment books for loan amounts of $500-$3000. (Beauty schools, air conditioning, like that). However, once the students had to pay, they went back to school! The payment schedule would be suspended and the new loan would be rolled over into the balance of what the student already owed. Payments delayed!
As I recall, $5,000 was the maximum. And those students had to make those payments eventually. The bank charged a government subsidized interest rate, but soon the politicians blamed the banks for gouging the underclass. I think the government took over completely . . . who knows.
Also, each ‘school’ had to be certified by the federal government. You can imagine how effective that was. Those students really got cheated.
The feds decimate every new field of funding that they open.
I remember when regulations first appeared for a direct loan program. I read them over and found there never was a point at which the Department of Ed officially took custody of the loan. There was no point at which the government could no longer force the the school to take back the loan. In this case I did not certify the Federal government to be responsible, and I did not participate. May God have mercy on all those students and colleges who become ever more entangled in the Federal government.