This is a common misconception. A big flagship state university typically only gets 10-20% of its funds from direct government subsidies/appropriations meant to support education.

The rest comes from tuition and other income.

Even "federal" student loans have largely been privatized.

The are around 1.7 trillion $ outstanding in government student loans and for about 90 billion $ of new loans every year. And you are wrong that these are privatized, the waste majority of the money comes directly from DoE. That said some of the administrations of the loans is privatized.