more to the point: it's an unsecured (ie, there's no collateral to take in the event of default) loan with a very low interest rate issued to a group of people who have little to no credit history.
a better comparison for an unsecured loan would be a credit card. please let me know if you find a credit card with anything near a 10% interest rate. afaik, the best rates are around 14% and only go to people with very good credit.
a private student loan is not a particularly safe debt to issue. even though the loan cannot be discharged, there is still a substantial risk that the borrower will never be able to pay it back. credit cards and personal loans are a pretty good comparison IMO, as the main difference is the fact that student loans cannot be discharged. this is in fact priced in already; even private student loans have much lower interest rates than any other kind of unsecured loan.
if you can't make your mortgage payments, eventually the bank sells your house and gets most of the principal back. the interest only has to cover the administrative cost of selling a few houses (possibly at a loss) and then it's all profit.
a certain fraction of people taking on student loans today will never make enough money to pay them off. now the interest has to be enough to actually cover the risk of the lender losing all that money.
even 13% is pretty good for an unsecured loan. according to nerdwallet's loan calculator, this is basically as good as it gets for unsecured personal loans in general. [0]
[0] https://www.nerdwallet.com/blog/loans/personal-loan-calculat...
Of course, some people take on student loans and fail to graduate.