If you have a bunch of colleges go out of business you suddenly have a scenario where degrees from those institutions are either potentially seen as invalid as they can't be verified and/or you have degree mills going "Nnnnnoiiiicccceeee, you want a college degree? Pick from one of these hundred colleges and we will send you aged printed transcripts and a perfect replica of their diploma" and then you suddenly have tens of thousands, or millions, of people with degrees that are fake but can't be proven to be.

Many employers would probably just refuse to acknowledge degrees from those institutions or at least considerably discount their value compared to an applicant that has a degree from a university that hasn't shuttered. Worse, you'd have people still paying for loans for degrees that can't be verified.