Summer’s end doesn’t just mean college students will be returning en masse to campuses — some for the first time since things went virtual in March 2020. It also means major problems for many alumni saddled with student loans. The moratorium on most federally held student debt is set to expire at the end of September. So far, the Biden administration has only wiped out the balances racked up at a handful of defunct for-profit schools and promised a report on the legality of using an executive order, as the left has demanded, to cancel a sizable chunk of the $1.7 trillion that more 45 million Americans owe.

Many Americans were never supposed to owe that much student debt. Yet a crisis that disproportionately affects borrowers of color and particularly leaves women struggling to repay loans is not a story of the best of intentions gone horribly wrong.

Rather, in the 1960s lawmakers purposefully crafted the Guaranteed Student Loan Program to jump-start a student loan industry — instead of really investing in colleges and universities to keep costs down or forcing them to provide young people with genuinely equal opportunities to enroll.

Lending to students seemed like a sensible solution to rising college costs and increased demand for higher education in the 1960s.

For one thing, more Americans were taking on debt than in previous generations and seeing it as an investment in the future. The New Deal’s mortgage program had turned many renters into homeowners, for example. That experiment was meant to revive the housing sector by guaranteeing bankers would be repaid for the mortgages extended, thereby encouraging lending. Even with this government push, the gains were not evenly shared. White men benefited most, by design. Nonetheless, the program was viewed as a success.

The Franklin Roosevelt administration had also set a precedent for directly aiding students, not campuses. An ambitious 1930s program paid students to work so they could afford to study. Later, Title II of the still-beloved 1944 GI Bill of Rights covered veterans’ college expenses.

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The Guaranteed Student Loan Program’s promise to repay bankers was a big part of that lofty goal. Like Roosevelt's mortgage legislation, this provision incentivized financiers to lend to students so that they could enroll, while campuses themselves determined eligibility. It was a convoluted arrangement that emerged in the midst of expensive, expansive government endeavors like the war in Vietnam and the Great Society — along with growing pressure from conservatives to cut taxes and spending.

Offering bankers another federally-guaranteed financial program was a cheaper, more American way to finance higher education’s expansion than directly and robustly funding colleges and universities so they wouldn’t have to charge tuition. After all, at the time, many Democrats and Republicans credited the mortgage industry with transforming a country of renters into a nation of homeowners.