I have a different perspective to add. I worked in collections for a few months, collecting for Canada Student Loans.
A bit of background. Today we are in the middle of an extremely protracted recession with historically low interest rates. As late as the early 1990s, interest rates on student loans exceeded 10%. Some of those loans had goddamn compound interest. How was that legal? No idea. And I won't even get into the fact that some students had loans from four different organizations, government and private.
Now you're thinking, so what? They signed the papers. They agreed to those rates. Yes, they did. But of the people I was collecting from, only a few actually finished their degrees. Only one (of more than a hundred cases assigned to me) was working in field.
Of the people who washed out, I would guess that about half of them were due to some kind of mental illness or other legitimate hardship. The guy who quit medical school and went to work at Office Depot was one such case. He was trying. But stress killed his medical career. He never should have started down that path. He just didn't have it in him. But you can't blame a kid for being ambitious, can you?
Another one was a single mom who went for a degree to support her family after the husband bailed, leaving them with an already heavy debt load. One day while she was at school, her kid came home from school, and somehow set the house on fire. The boy died, and she had no insurance. I looked up the newspaper article in the library. She was telling the truth.
You can't collect on those loans. These students will never have the earning power to get in front of those outlandish interest rates, much less pay off the principal.
There really needs to be an independent body that can counsel these people to both declare bankruptcy, and get medical help for their depression. But there isn't. So you've got these poor saps paying a hundred bucks a month against a loan that is mathematically impossible to pay back at that rate. The only people benefitting are the banks. That hundred bucks could make a real difference in the lifestyle of a minimum wage earner.
Yeah, there was that one guy. He got his CGA, then decided not to pay back his loan. He sneered as he told me that he knows the rules I have to follow, and that I can't do fuck all to force him to pay. I got him fired from his prestigious multinational firm by repeatedly calling his workplace at the absolute maximum number of calls allowed by law. So... win? Needless to say, I got fired from that job. They liked me just fine, but I wasn't able to collect.
So do I think we need another way to make the lives of these poor washouts miserable? Hell no. Let them find a way to eke out a living as best they can.