> On the other hand, they are adults and by definition they did borrow that money, the lender is "right" to expect to see that money back.

I don't necessarily agree with that. Who's fault is it really, when banks give out loans to young adults with no credit history to get an unknown degree at an unknown total cost? We punish young adults for making a poor decision, but we don't punish banks for giving out loans that don't have collateral. Seems unfair, no?

And that's the problem. It's a risk free proposition for lenders - students can't default, the interest rates are high. But by allowing bankruptcy, then all the risk falls on the banks. Student loans essentially shouldn't exist, and only do because of the demand for college, which leads into the second problem:

There aren't good alternatives to college in the west.

Your moral judgment notwithstanding, here we are, discussing the problem of people unable to pay their expensive guaranteed loans.

Perhaps your proposal is that, before someone takes out a loan, they take and pass a course that covers interest rates, credit scores, expected income, alternatives, and other such issues? Is that what you meant?

I won't speculate whether it has anything to do with politics or financial literacy, but for many people in the US, debt is a widely accepted cost of participating in society. I am fortunate enough not to have any debt, but many of my peers will regularly go into debt in excess of $100K in order to afford the cost of higher education and a home. Debt is just an ordinary part of life in the US.

And thus the cycle continues.

This is a somewhat insidious form of gatekeeping.

Especially considering people make much more money if they have a college degree. Even if you don't understand debt, you understand that. The problem isn't incapability of understanding debt - it's never actually being taught it.