Trigger warning for those who hate the bullcrap economic system in the United States
So I stated that the German system works, because they make their money back as a sort of "loan" itself. Citizens are educated, citizens get better jobs, citizens able to go to higher income bracket, citizens pay more taxes with their high income, and hence the loan is repaid via that way to the Government. Everyone's happy, and the system works as a sort of "long term tax-loan" as opposed to "private loan"
The reason it works with government and not with a private sector is the way the government is paid back is via their increased tax revenue from you assuming you get a better paying job due to the education. A private student loan means you have to pay it back no matter what, even if the loan wasn't fruitful and the education didn't net you a high-paying job
So you see, the problem with private student loans, is you owe money back whether or not you get a good job that pays well. If you go to college for 4 years on student loans, and the economy tanks afterwards (poor saps who graduated in 2007), you're screwed and just need to hope you get lucky. You still have to pay that loan back and it's going to be painful because the economy is crap.
However, with the government subsidizing loans, and expecting to get a return on their investment via taxing you once your high-paying job puts you in a wealthier income bracket, that means you are only paying back the loan if the loan worked in the first place.
The government has an incentive to keep the economy going, because they lose their investment if they can't get high paying, taxable jobs for the workers they educate. Whereas here, the students take the hit if the economy is crap, the government takes the hit because the students don't get to a higher income and can't be taxed as much, but the companies doing the student loan get away scott free. There's so little consequence for the debtors to care about whether the people they lend to succeed or not. Often they've made back their money even if you end up not being able to pay it off on time or not. No skin off their back, and it allows them to be absolutely absurd in how they structure their loans.
It's really absurd how we keep it this way. Part of the problem is we have a regressive tax system in many states. That is, certain states actually have the rich paying LESS tax than the poor. So what incentive does the state have to get you an education for a job that gets you to a higher income bracket, when in fact they will not make a substantial income increase for doing so? They're perfectly intent on allowing their citizens to be without college education, because they don't tax the rich anyway. The United States in general is so bad on the Gini index (income inequality) due to our notoriously low taxes on the wealthy by way of loopholes. so the whole system I described above, where the government makes a return on their investment by allowing their citizens to prosper- doesn't even freaking work because our tax code is so weighted towards making money off the middle-class as opposed to the top earners.
