The argument is that there is an opportunity cost to taking out student loans because the money used in repaying can be utilised in other ways. However, opportunity cost exists in everything. The people who willingly take out these loans consider the education worth the cost. It is actually beneficial to society at large that university graduates begin their employment earlier due to debt since it makes them productive members of society more rapidly than they might have done.
For example, in Ireland where higher education is free graduates often take a year or two to travel and “find themselves” while giving little or nothing back to the state that has financed their degrees. It is good that people begin contributing to the economic life of society after graduating from university, rather than spending their youth in unproductive pursuits.
This also means that college teaches young adults the value of budgeting and being able to manage their finances well. Student loans are often the first major financial issues young adults grapple with. Having a clear plan to pay them off quickly proves you know how to budget your money, skills people use again and again when buying cars or houses.
Having to pay for university also incentivises students to perform academically. If higher education becomes free, it might devalue a degree, leading to students cutting more classes or not trying as hard because they don’t have to pay for anything. The current price of college drives students to complete their schooling as quickly as possible so as to reduce debt. Without that financial drive, students may become lazier.