I don't think people really understand what they're saying when they say that people shouldn't have to pay back these loans. The loans are going to get repayed, it's just a question of who. You can't take it out of the defunct college, those people, and that money, are gone. Basically you're saying that taxpayers should foot the bill. You want to pay the government back out of your own pocket? Because that's what this means.
And anyways, we shouldn't even be debating this. University should be free, period. And yes, I know "free" = "we" = "our pockets". That's perfectly fine. Or we should start funding plane tickets and visas to send low income people to these countries[1] for study; requiring them to maintain a quality GPA or something. The world would be a better place for all of us if the "haves" weren't so adverse to paying for the "have-nots".
1. http://www.washingtonpost.com/blogs/worldviews/wp/2014/10/29...
Altruism's great and all, but you need to think very hard about what it means to provide a benefit to everyone. It's not just the people who were legitimately scammed.
If that's the case, I can send you a degree from WhafroU via PDF for a tidy sum within an hour. Get in touch, folks!