I think you have an outdated model of student loans. There's no longer a government guaranteed bank issued student loan model (FFEL ended in 2010). Instead the overwhelming majority of student loans are made directly by the Department of Education. For better or worse the student loan issue is almost wholly about government action, not banks.
Incidentally the same is true of mortgages post-2008. Again for better or worse, the US at the present time has a highly socialized credit sector when in comes to individual debt.
I did not know that but it doens't really change the conclusion. If the government left the banking sector alone then banks would have to handle loan and security as a matter of self preservation.
Looking from a historical perspective we are really running late on a dept-reseting event. Usually a civil war or bank run caused a reset on the economy once in a while but the latest period of government banks, global banks and banks too large to fail has so far been protected by government interference from the same fate. The result is that there is a lot more unsecured debt in the economy than a strict market based economy with no government interference would allow.
Incidentally the same is true of mortgages post-2008. Again for better or worse, the US at the present time has a highly socialized credit sector when in comes to individual debt.