Historical point you've completely missed. You used to be able to declare bankruptcy and discharge this debt until very recently. This was not "decided" this was a trap sprung on the working class at a time when blue collar labor was almost entirely off shored.

> and just forgiving the debt only will make it all more expensive

That's why you discharge the debt instead. This is an institutional failure. They knowingly pumped a market at tax payer expense. The hair cut is theirs to take.