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.

Lawmakers really embraced lending as the solution to the college funding problem in the 1960s. Textbooks usually laud the 1965 Higher Education Act for unprecedented federal support for nonprofit colleges and universities. President Lyndon B. Johnson celebrated money for campuses, libraries, classroom equipment and teacher training but publicly and privately emphasized new student assistance options, particularly the new Guaranteed Student Loan Program seemingly buried in this storied legislation.

Congress envisioned the core of this program working like federal mortgage assistance. New Dealers had promised financiers’ repayment on well-regulated, low-interest, long-term mortgages to jump-start an industry capable of creating a nation of homeowners. Today we know that this 1930s experiment exacerbated inequality, but in the 1960s Great Society liberals considered that strategy the most cost-effective and politically palatable way to expand higher education.

They hoped to create a student loan industry that would enable students to easily finance the fees that colleges required. The government, however, did not guarantee young people that they would be admitted to college, be able to graduate or find the well-paying work necessary to repay their student loans.

One of the Higher Education Act’s architects lamented that the Guaranteed Student Loan Program quickly became a “fund-eating dragon.” There was a mid-1960s spike in college closures that foretold a new era of austerity for which students and parents would pay the price. Beginning in the 1970s, state and local governments across the country prioritized slashing taxes and government programs even as inequality increased, well-paying work steadily disappeared and tuition soared.

Many blame skyrocketing costs on the luxurious dorms and gyms that colleges have recently used to attract tuition-paying students. But those price tags also reflect decades of state disinvestment and increasing operational expenses, including necessary building repairs, campus expansions, technological upgrades (like better phone lines and Internet connections) and adhering to new federal health and safety rules.

Beltway Democrats and Republicans dealt with these rising costs by turbocharging the student loan industry. They made for-profit schools eligible for federal student assistance programs, enabled parents to borrow, made discharging student debt during bankruptcy proceedings almost impossible and launched Sallie Mae, a government-sponsored enterprise that made buying, selling and profiting off student debt easier. Lawmakers even presumed that anyone receiving the now-celebrated Pell Grants would have to borrow to pay for what those limited scholarships did not cover.

Reforms have done little to help the millions drowning in debt and the colleges struggling to remain open. Since the early 1990s, lawmakers have battled over replacing guaranteed loans with direct loans from the government, tax breaks, public service forgiveness programs and repayment options, which often leave parents and students of color paying more over a longer period of time than their wealthier, White classmates. President Barack Obama considered signing the 2010 Health Care and Education Reconciliation Act “two major victories in one week,” but just as Democrats spent the next decade defending Obamacare, they have fought a massive student loan industry nurtured by guaranteed loans, “a sweetheart deal,” Obama recognized, “that essentially gave billions of dollars to banks.”

Those profits did little to shore up the academy’s finances — even before the coronavirus upended many schools’ already-strained budgets. Congress and the Trump Administration did not offer much more during the pandemic. The $14 billion allocated for campuses in the March 2020 Cares Act included $6 billion for emergency grants for students as well as funds to cover costs connected to the virus. Lawmakers also expanded access to Pell Grants, and Americans paying off certain kinds of federal student loans have been given several months of suspended payments and interest charges. Congress did not provide much more help in the December stimulus bill.

Progressive Democrats have consistently called for massive loan forgiveness as Congress debates pandemic relief. Partially or fully wiping out federal student loan debt would be a godsend to many Americans but not be enough to slay the fund-eating dragon that has become a many-headed hydra. Federal student loans and the industry they spawned have never adequately funded colleges and universities nor enabled Americans to afford college fees.

Massive forgiveness, while beneficial, would not solve the bigger problem: the need for a fundamental restructuring of college financing and government support for higher education. Without such a change, college costs will continue to increase, especially as demands for everything from the research needed to meet future public health crises and increased mental health services for students continue to rise, leaving campus finances precarious and trapping students and parents in increasing amounts of debt.