If federal student loans and other financial supports for higher education are abolished, what would be the status of the GI Bill, which funds college for military veterans?
There is a clear moral distinction between the federal student loan program and the GI Bill. They spring form opposite moral principles.
The government's proper job is to protect individuals from those who would violate their rights by initiating force against them—e.g, domestic criminals and foreign enemies. This is spelled out quite clearly in this nation's philosophic blueprint, the Declaration of Independence, which states; "to secure these rights, Governments are instituted among Men." To perform that task, governments must maintain domestic police forces and a military. The people hired in that capacity must be paid, and paid well enough to attract competent, dedicated individuals.
Providing servicemen and women with financing for a college education, whether through a GI Bill or other means, can certainly be a part of that compensation. Servicemen and women do the job of protecting the rights of Americans from foreign aggressors, so college financing is payment for these vital services.
Subsidized student loans are the opposite. In that case, the government is the aggressor against the American taxpayer, seizing their money and handing it over to other Americans, not because they earned it by protecting their rights, but because they need it. But need is not a license to steal, with government as the hired gun.
Granted, the GI Bill is funded by coercive taxation, and that is wrong. Government functions should be funded by voluntary means. But the issue of government funding in a fully free society is a separate issue. One may also argue about specific provisions of the GI Bill. But those issues are secondary to the principle involved here. Individuals who sign up for legitimate government jobs—the job of protecting American citizens' individual rights—should be paid in one form or another. The GI Bill is a form of payment to military veterans, and is therefor, in principle, legitimate.
End, Don't Reduce, Federal Student Higher Education Funding
On "Nightmare" College Debt
How Would Government Be Funded in a Free Society?—by Craig Biddle
The Virtue of Selfishness (Chapter 15)—by Ayn Rand