The entire notion of taxpayer funded student loans is a scam on both taxpayers and students. It’s a system that allows the colleges/universities to charge any tuition they want and guarantees there will be an artificial demand.
For about a decade at least 1M student loan holders default per year. Long before the defaults reached that high, everyone involved knew that student loans were far outpacing the economic value, and yet not a single college or university stepped up in goodfaith to blow the whistle, they continued to suckle at the tit to the detriment of their own students.
Education is supposed to benefit students and the nation as a whole but the ridiculousness of loans has ensured it ruins lives and at >$1.5T in taxpayer funded debt that continues to grow exponentially it is a detriment to the country.
Collapse of student loans will of course have an impact of the college/university landscape, but the industry as a whole will not collapse, rather tuition will “collapse”, or come down, to what students can actually afford out of pocket without going into debt. And if the universities/colleges somehow can’t survive on existing taxpayers subsidies from the Dept. of Educations $68B annual budget plus out of pocket tuition rates, then welcome to the real world your university/college is a failed business.