By "dozens of predatory banks" and "medical billing companies" you mean "the federal government" (who is owed 92% of student loan debt) and "hospitals and doctors offices" right?
Student loans are a bit more complicated, but yes absolutely I expect to see massive defaults hurting the federal balance sheet and for schools who failed their students to start shutting down. This isn't a bad thing, it's healthy.
Nothing wrong with getting a worthless degree: if you are into art you should get an art degree. However you should first get a good job that pays your bills and pay for that degree from your own fun money. As a society I help with your basic education because the value of everybody knowing how to read and do math makes it worth it.
Er, that's pretty much how we got here, they have been and are being given. Government-backed student loans have no requirement that they be spent on degrees that are lucrative.
The implication that government is choosing which degrees are worthwhile is scary...