Ron Paul is calling for an end to the Federal Student Loan program saying that the program (or more specifically government) is responsible for soaring tuition costs. Look, I like Ron Paul but he is dead wrong on this one. I went to UW-Madison when the State (government) was subsidizing the school by 2/3. So, with research grants from corporations and the federal government and out of state students paying much more those of us from Wisconsin were left with paying $1000 per year. Not cheap but an amount of money that could be obtained by working a minimum wage job. The Federal Student Loan program also existed at that time. What has changed? The subsidy from the state to UW for one, they are slated to take a $250 million dollar cut this year alone. Federal research grants for another. This has resulted in tuition now being nearly $10,000 per year. In order to earn that much money working a minimum wage job you need to work full time for more than 33 weeks. The sad reality is that most 18 year olds are going to working for minimum. I would contend that it is nearly impossible for someone to "work" their way through school today.
There are still private research grants coming into the universities but this is a problem in another direction. A private company can place research into a university for much less money than doing it themselves. The problem is that when the students that did that work graduate and need a job no jobs are available because the research has been outsourced to the universities.