When you pay $10,000 to address $1,000 of a $5,000 loan, you have not made things any worse for the rest of us, except to help promote a system that allows unscrupulous creditors to exploit people.
It's not the systems fault that those people took out those loans. At some point, people have to take responsibility for their actions instead of always blaming somebody else.
What does that have to do with your original argument?