Ken Griffin, the billionaire founder of Citadel, said government subsidies for home mortgages and student loans have created profound economic distortions.

The government’s backing of student loans has led to dire consequences, Griffin said Tuesday at the Milken Institute Global Conference in Beverly Hills, California. The cost of college education is exploding since the government got involved, and a generation of graduates is disillusioned, he said.

Griffin, 50, was interviewed by former junk bond king Michael Milken.

Other highlights from the interview:

When asked if Citadel would go public, Griffin said he enjoys the flexibility that comes with being privately held.

The lack of liquidity in financial markets is a bit of a myth, Griffin said. It’s never been cheaper to trade equities and swaps.

With more private capital available, firms can grow and wait longer before going public. This means there are fewer growth stocks available to the average investor, he said.

Griffin said to improve education in inner-cities, schools should mandate longer days and years.

Griffin, who founded Chicago-based Citadel in 1990, started trading convertible bonds from his dorm room at Harvard University. The firm today manages $29 billion with offices around the world.

This story provided by Bloomberg News.