The May 10 editorial “Cap, gown, debt” described the student debt crisis accurately but offered the wrong diagnosis and the wrong remedies.
Your suggested approach cannot be implemented, because it flies in the face of the incentives the system creates for universities and if implemented would make things worse, not better.
Allowing bankruptcy and reducing the interest rate would compel the federal government to cover billions in additional losses with taxpayer dollars. It would reduce the incentive for students to consider the career prospects of the degrees they pursue as they realize that they can do so at no cost to themselves.
Easier borrowing increases the cost of education. The university I graduated from in 1972 charged $6,000 per year for all expenses or $33,700 adjusted for inflation. Today it charges $66,800. This wouldn’t happen if students didn’t have the borrowing power to pay the high price.
It would be great if universities would cut administrative bloat. But they cannot so long as they are burdened with innumerable regulations, such as accreditation, outcomes assessment, Title IX, the ADA and all the diversity officers and counselors they seem to need.
The better solution is to make borrowing harder, not easier, and to reduce the regulatory burden on universities so they can shed some administrators and hire more faculty.