Originally Posted by Bostonian
Artificially low mortgage interest rates contributed to a housing bubble. Raising student loan interest rates to a level reflecting their credit risk would exert downward pressure on college costs, since many people would not be able to borrow as much.

There's minimal risk to the lender, because educational debt cannot be discharged in a bankruptcy. That makes this an attractive can't-miss investment opportunity. Any (minimal) risks can be offset by insurance and default swap purchases.

Plus, tuition can only go up!

Sound familiar?