I don't think it is unethical. If people get overwhelmed by student debt because their degree doesn't actually result in job opportunities that allow them to pay that debt back then they have no obligation to pay the debt back. It was the lender's decision to invest their money into such an obviously money losing strategy and yet they did so despite the high risk. The word "undischargeable" made the lender blind but the reality is that the lender was just plain irresponsible with his money and no government guarantee can change that.
> If people get overwhelmed by student debt because their degree doesn't actually result in job opportunities that allow them to pay that debt back then they have no obligation to pay the debt back.
The debt is the obligation to pay back. As far as I know, education loans don't include the clauses you mentioned.
> It was the lender's decision to invest their money into such an obviously money losing strategy and yet they did so despite the high risk.
That's true, but that doesn't absolve the person who took the loan from the responsibility to pay it, and doesn't make not paying it any less unethical.
Ethics and causality are not the same. If you don't lock the door of your apartment, that can dramatically increase the probability of being robbed, and your actions would be the cause of this robbery. But it wouldn't by any yota affect the ethical side of it. (I'm not saying that not paying back the loans is the same as robbery, I'm just explaining the logic using a more obvious example).
It's a bit of both isn't it? They gave you so much credit because they assessed you as the type of person who wouldn't do that. If they were 100% sure that you would be spending recklessly, you'd probably have a limit of a few hundred at most. Part of their job is making that assessment correctly.
You're conflating "fault" with "responsibility". The second you signed up for the line of credit, the manager who evaluated your application became responsible for what happens afterwards. If you squandered it, it might be your fault, but the manager is the one who'll be getting grief for giving it to you in the first place.
