Forty-three million student loan borrowers are too big to fail. Debate has raged since November about massive forgiveness on Day 1 of the Biden administration. Senate Democrats asked for an executive order forgiving $50,000 in debt, but instead the new president instructed the Education Department to extend the ongoing, interest-free pause on federal student loans. Yet, neither that ongoing deferment nor partial forgiveness will be enough. Until politicians at the state and federal level rethink how we fund higher education, students and parents will remain trapped in increasing amounts of debt, exacerbating inequality, even as colleges and universities cut programs and even close.

Lawmakers created the student loan industry that has left millions drowning in college debt. Most nonprofit colleges and universities, whether public or private, have relied on tuition revenue to stay open, which helped make them far more accessible to the country’s largely White, male elite. But loans were rare before the 1920s. Very few campuses had the resources to extend credit to students in the hopes that alumni would earn enough after graduation to pay back the cost of earning their degrees.

Even though the administration of Franklin D. Roosevelt considered a more educated citizenry imperative to economic recovery in the 1930s, Roosevelt and his advisers had no interest in offering citizens such a risky financial product. They instead created a complicated work-study program and educational guarantee in the 1944 GI Bill of Rights that helped young people and veterans afford tuition.

Those programs never covered the whole cost of educating more students — even as demand and need rose in the wake of the Great Depression and World War II. Nor did state legislatures step up to the plate and generously underwrite higher education to meet this increasing demand, so colleges and universities raised fees to cover expenses.

Liberal Democrats and Republicans in Congress recognized that a growing number of Americans needed and wanted higher education in the Cold War’s early years. Like the New Dealers before them, these legislators recognized that expanding educational opportunities was vital for an individual’s chance to succeed and the entire nation’s prosperity. They also understood that young people could hardly afford college expenses, even though the costs seem unbelievably low by today’s standards.

The roughly $7,000 needed to pay for a four-year degree was daunting in 1960, when, as presidential candidate John F. Kennedy noted, “one-half of all American families had incomes below $5,600.”

“Industrious students can earn a part of this,” he explained, “they or their families can borrow a part of it.” But “they cannot be expected to borrow $4,000 for each talented son or daughter that deserves to go to college.”

Yet bills to directly fund the academy and lessen its historic need for tuition revenue perpetually died in Congress. Lawmakers decried attempts to tax and spend more, and what they claimed would erase the separation between church and state to aid religious colleges and undermine states’ rights. Ardent segregationists successfully deployed the latter argument during months of debate over education legislation and the possibility of falling behind the Soviets after Sputnik’s launch. The celebrated 1958 National Defense Education Act only ended up offering temporary, limited help for K-12 and postsecondary schools as well as college students, who could receive either a small scholarship for graduate study or a $1,000 loan for undergraduate coursework given out from eligible campus financial-aid offices.