Although there is a fairly comprehensive history of America’s interaction with promoting education, the biggest seed that promoted the growth of federally guaranteed student loans was the Higher Education Act of 1965. So how does my sensational title make any sense considering Hitler was killed about 20 years prior?
The HEA came about because of LBJ’s great society programs. The Great society only existed because the people in charge of the country were all World War II generation idealists who believed that the government involvement in our lives could actually make things better. They lived through the government ‘fixing’ the great depression, and defeating Adolf Hitler and winning World War II. So It stood to reason that government involvement in education can arguably be a good thing.
Politics being what they were, the types of programs that were passed as part of the HEA were not very sophisticated. There were grants for poor students, loans for middle class students and loan guarantees for the banks to make sure they would move forward with the risk of giving money to students who had limited ability to pay those loans back. The biggest selling point to the banks was that the loans they were giving would help create better customers in the future.. i.e. saddle a student with debt so when they aren’t a student they can be saddled with more debt. – but that’s a blog post for a different day.. or maybe a different blog.
The bottom line is that the environment needed to defeat Adolf’s tyranny had the unintended consequence of creating a generation that thought federally guaranteed student loans were the best thing to saddle children with.. and government being what it is, that line of thinking has created the education bubble PIC’s are dealing with today.