> It's not like people used to file bankruptcy on graduation day just to screw over the system
There used to be a social contract, where your country provided you with certain guarantees, and we felt some obligations in return. This was one of the main ideas of the Enlightenment, and also the founding of the USA. We abandoned that decades ago. Neoliberalism erased all "American values." The only American value left today is greed.
In that lost time, you're absolutely right: people would not have just bankrupted their loans on graduation day. College used to be affordable. The country provided for its people. There was a guarantee of a basic standard of living. You could raise a family as a single income household with just a high school diploma.
These days, no one can afford kids anymore. You need to have a Master's degree just to afford a crappy one bedroom apartment downtown. If you fall down, there is no rock bottom. Skid Row in LA has been described by the UN as more deprived than anything they saw in refugee camps or Brazilian favelas. US tent cities are gross violations of human rights. The decadent ruling class openly mocks the idea that human rights even exist in the first place, only pretending to acknowledge such things when manufacturing consent for war with Russia. You have no right to life, no right to liberty, no right to the pursuit of happiness. You will own nothing, and you will be happy (or else).
In this Brave New World, where the social contract has long been shredded and there's no such thing as society anyway, absolutely everyone would declare bankruptcy on graduation day if they could. Just like all the criminal business owners walked away from $4 trillion of fraudulent PPP loans they didn't need. Just like Jeff Bezos takes every legal tax deduction he can find and more, despite not needing them. I would declare bankruptcy on Graduation Day. You would, too. You would have to be an imbecile not to. In this world, you take what you can get as long as it's legal. If you find a loophole in the system, you exploit it unapologetically.
JFK's most famous quote was widely applauded at the time: "ask not what your country can do for you, but what you can do for your country." The underlying implication there is, the country already did a lot for its people back then. Half a century later, all these years of all take and no give, it's about time we started asking the reverse. America's Human Resources are all tapped out. No more blood left to draw from these stones. What has this country ever done for you? When has it ever given you a single dime back, in return for all the taxes you've paid? Even universal healthcare is too much to give for them, but they'll give Ukraine everything and more. They'll fund their universal healthcare system, their pensions, and all the things the oligarchs have stolen from us. The child tax credit cut child poverty in half overnight, but American oligarchs are demons, they enjoy seeing kids going hungry. It's good for business or something.
It will take another generation or two before your theory is true again -- that people wouldn't just declare bankruptcy to start adulthood at zero. You'd need to fully rebuild the social democracy that has been systematically destroyed piece by piece ever since black people got human rights in the 1960s. Even if we got FDR's Second Bill of Rights enacted tomorrow, young people have been completely broken by this Hellworld we've raised them in. They've been forced to ritually practice their own deaths on every equinox in these truly disgusting school shooter drills every year of their lives, since they were in preschool. Part of rebuilding that underlying social democracy would have to be making public university free again. There's no way around it. Either it's free again via declaring bankruptcy on graduation day, in some sort of quasi-baptism in the civil religion, or it's via direct funding as it was before higher education was desegregated. Honestly, I kinda prefer the graduation day jubilee. It begs the question, why don't we just reset all the debt? It would delegitimize the entire system of debt that enslaves the human race.