Otherwise, you'll have people graduating, declaring bankruptcy, and getting a free ride through college sticking lenders with the bill.

This system is putting a huge strain on the economy and national birth rate. Debt burdened people in their 20s and 30s can not buy homes, which in turn screws the real estate market, which in turn screws the home related cyclical industries. Young people are delaying having children because they can not afford them, which in turn impacts all child goods industries, and long term will affect the viability of our SSI / Medi* programs. This low birth rate is why we depend so much on immigrants to keep a stable population.

The way the entire system works is pennywise and pound foolish.

Say, what happened in 2008, when lenders couldn't pay their bills ?

These arguments would make sense if they were applied consistently. But in practice, socialism for the rich, debtor prisons for the poor.

Think it like this: You have a sibling that is a bad gambler. They play roulette and lose big as expected and drive the whole families finances to the bottom. They then go to your parents complain that roulette is bad and ask your parents to bail them out. Your parents instead of punishing your sibling and make them repay the debt, say that it is fine please don't do it again and we don't want you to declare bankruptcy, but we will have your brother/sister (that is you) pay the bills.

[0] https://en.m.wikipedia.org/wiki/Eve_of_Destruction_(song)