I don't really know what the fuss is about. Government is able to provide some services better than the private sector, -because- the profit motive is removed.
I don't follow your logic.
Private businesses are motivated by profit. They get more profit by getting people to buy more of their goods/services. They can't
force someone to buy, so they have to make their product better in order to attract customers. They don't provide a satisfactory product, people stop buying, the business either has to improve its product or shut down.
Private businesses also compete with each other. They want to make their product better than their competitors so that they can attract all the customers and make more money.
It is in their best interests to provide a product that customers like.The government, however, does not work this way. If the government takes over a market (as is happening with student loans) there are no competitors. The government provides the only source of the product, and if it SUCKS, too bad. You're stuck with it, like it or not. Contrary to popular belief, the government does NOT have some holy, righteous desire to do the best for everyone. The government is run by profit-seeking humans, not stainless angels.
Furthermore, I think the primary reasoning behind this is that Banks in America deliberately target students with overpriced loans that they will spend their entire lives paying off, and with credit cards with unspeakable strings attached in an obvious attempt to exploit the naivety of young adults who have not had to deal with financial institutions on any appreciable level before.
What do you expect? These banks are firms are out to make money, not altruists who want to make sure that Joe Schmoe gets to go to college.
It's not the government's job to babysit ignorant individuals. It is the individual's sole responsibility to be aware that these banks are profit-seeking entities, and treat them as such. Know what you're getting into before you rack up $50,000 in credit card debt. If you step in front of a train, you're gonna get hit.