Student loans enable universities to vastly increase their operating expenses, without an immediate marketplace penalty. The administration is the true beneficiary, not the student.
When I attended a university in Canada, in 1968–1971, I paid about $8 a week for a room off campus and about $10 a week for food. (In those days, the Canadian dollar was about 75¢ U.S.) I had few other expenses, and worked in the campus library for the lot of them. I even saved money for my wedding.
There was very little administration in those days, and little was needed.
That was not because we had no possible causes of division: