[dpark]

Is it not also a moral hazard to lend unceasingly knowing that you'll destroy the economy before taking a hit on the bad loans you've issued?

[gozur88]

I don't think so. Getting companies to lend to students was the whole point of the program. Normally you'd use the term to describe unwanted side effects.

[dpark]

The term describes the situation in which the cost of one party's risks are born by another party. Whether it's "unwanted" doesn't actually seem that relevant. If foolish incentives create a moral hazard, the moral hazard still exists regardless of the intent behind the incentives.