I don't see allowing bankruptcy as a problem. Companies are in the business of lending to students, that doesn't dry out overnight. There are periods of more risk on, and risk off so there would also be cycles. A car analogy: cars can be repossessed but minus covid area a used car tends to be a bad investment (not an investment at all) - a money looser and even on repossession ends up at a loss. Yet banks still lend out to cars. What happens when banks don't lend? Dealer incentives and financing. Colleges are not going to simply put their hands up and say, well students can't afford us anymore. Colleges, which are in the business of selling degrees, will evolve and find a way to lend money. Their main target market depends on getting these loans.