One reason higher education is so expensive is because there is too much easy money given to students. Any student with a pulse can get a loan. Colleges and universities know this. They price themselves accordingly. Thus you have thousands of Marxists and other egalitarians earning six figures. The perfect solution would be to eliminate all federal support of student loans. Instead, we have the worst situation.
Scam companies like Sallie Mae pay off universities to guide gullible students into taking loans from the scam companies. The government backs Sallie Mae, giving them special protections. For example: Student loan debt is generally non-dischargeable in bankruptcy. We have, in a word, crony capitalism.
The administration has pushed for federal financial aid to go directly to students, not to banks that lend money to students. Obama said he wants to eliminate the "middle men" lenders that he says add inefficiency to the system — "that's a premium we cannot afford, not when we could be reinvesting that same money in our students, in our economy and in our country."
His proposal is a nice middle ground. The perfect approach exists in paragraph one: Keep government out of the education market. The prefect approach will not occur. The worst approach - which was encouraged by Republicans and Democrats alike - is the one we currently have.
Obama's efforts at reform the corrupt student lender industry should be applauded by all libertarians. It's not perfect, but it's better. Will his reforms be applauded? They should be.