The universities are first and foremost responsible for this situation, especially their predatory Masters’ programs that cost several arms and legs and offer little to no improvement in one’s career marketability.

Make student loans dischargeable in bankruptcy, and allow creditors to pursue the universities for repayment. Spending $100,000 you can’t easily pay back for a useless degree is foolish, but nobody should have been allowed to sell a product like that in the first place.