I'm talking about real costs. The government doesn't lose money by guaranteeing loans (in fact they make money, which is a totally different — but reasonable —argument against the current setup). I assume you mean opportunity costs as in "what else could the govt fund" with that money; if that's your claim, it again belies a misunderstanding of what's going on. You seem to have created this false narrative in your head that doesn't reflect reality.

There is much research, especially in behavioral economics, that shows that more objective decisions can be made by creating systems that facilitate more rational decisions. So my current position is that we should set up systems/institutions to foster those better decisions rather than push everything down to the individual, given the complexities of modern life. So to directly answer your question, there's decades of research that shows individuals aren't great at making rational decisions at the individual level. It's also interesting that you simultaneously seem to claim the "state" should make decisions, but also that institutions don't know what's better than individuals. It doesn't make for a very cohesive take.

> I'm talking about real costs. The government doesn't lose money by guaranteeing loans (in fact they make money, which is a totally different — but reasonable —argument against the current setup).

The government guaranteeing arbitrary loans isn't free in economic terms. Just like eg increasing the length of patents from 20 years to 40 years ain't free, even though it won't show up as a cost on any government balance sheet.

So what do you think the non-monetary realized cost is? And that cost compare to the benefit of a more educated populace?

At least with your patent example, we can measure it in economic terms, since patents are a commercial protection. Once we start getting into wishy-washy measures, people can make just about any arbitrary point to fit their narrative.