In fact, we shouldn’t be subsidizing public education at all.
Hillsdale College -- they have their own group of lenders lined up who fund their students needing loans at rates generally between the federal rates for one simple reason-- their graduates generally get good jobs and pay back the loans with a default rate of damn near zero.
Bank of North Dakota-- provides funding for students needing loans within the state. Loan limits are tied to marketability of the degree and progress toward graduation. Again, their graduates generally get good jobs and pay back the loans with a default rate of damn near zero. Those that don't have a very limited loan liability either because it is an unmarketable degree or they aren't making sufficient progress toward graduation. So the loan exposure is limited. It is a default of generally $5,000 or less.
Two successful models, one college based and one state based. Fedzilla can get out of the loan business completely!