Stiglitz: Student Debt and the Crushing of the American Dream

[ProSense]

3. So

"This is not a new problem, and banks and interest rates are only a part of it. The cost of in-state tuition has exploded because state legislatures have de-funded higher education."

...you don't want to address the part resulting from "banks and interest rates"?

Also, it is a new problem. Banks were not involved in federal student loans.

Since the bank-based loan program began in 1965, commercial banks like Sallie Mae and Nelnet have received guaranteed federal subsidies to lend money to students, with the government assuming nearly all the risk. Democrats have long denounced the program, saying it fattened the bottom line for banks at the expense of students and taxpayers.

“Why are we paying people to lend the government’s money and then the government guarantees the loan and the government takes back the loan?” said Representative George Miller, Democrat of California and chairman of the Education and Labor Committee.

Democrats celebrated the legislation, a centerpiece of President Obama’s education agenda, as a far-reaching overhaul of federal financial aid, providing a huge infusion of money to the Pell grant program and offering new help to lower-income graduates in getting out from under crushing student debt. Still, the final bill is less ambitious than the original proposal.

http://www.nytimes.com/2010/03/26/us/politics/26loans.html

And that's not to mention private student loans.