I am not an economist, but at its core, the idea that government should subsidize interest on a loan is wrong. All loans have to be repaid with interest. It doesn't matter if it's a home loan (also called a mortgage), an auto loan, a student loan, or a business loan. It is expected that borrowers will repay their loans, with interest, out of pocket. Loans are not forced on borrowers. Borrowers could choose not to take loans. They could save for a cash purchase, or choose alternatives, like not going to college. For the government to subsidize interest on loans is like for the government to subsidize Playstation purchases. It's a purchase the borrower should be responsible for.