The origins of the federal student loan program are well documented and follow a similar trajectory to most government subsidy programs in American history. Each previous government subsidy program has had a history of mismanagement, inefficiency, backwards incentives, and inflationary pressure via creation and distribution of new dollars in exchange for goods and services at rates below their market value.
The federal takeover of student loans is a subsidy because it sells below market value the interest rate, the lending standards, and the repayment terms of this specific type of loan. These categories were exacerbated during the emergency response to the pandemic beginning in early 2020: interest rates on federal student loans were reduced to 0 percent,

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