To your first point about the age of majority and being able to enter into contracts...
At age 18, today, it is probably safe to bet that 80% of high school graduates cannot create a loan schedule from scratch. Being unable to do so, they demonstrate the inability to understand a loan amortization sufficient enough to contract around one. Ostensibly, most students are headed to college precisely to learn about what an amortization schedule is, so the hypocrisy surrounding student lending is off the charts, fundamentally so.
If the "policing" entities for student lending set about to prequalify students based upon their demonstrated ability to understand the concept and the obligation and explain their intended career prospects, then you'd have a competent-enough adult ready for signing such a contract. The fact that nothing like this exists is evidence that this fraud is by design and widely accepted by the industry. There should be room here for class actions--and successful ones at that. Talk about predatory lending...
you revoke every credit-hour earned and thus the degree is revoked if a person files for bankruptcy and successfully throws off the debt. Congress can do this since Congress explicitly has the power to set uniform national bankruptcy law binding in all 50 states.
That's it. Three simple steps, problem solved.
#1 and #2 are opt in for all current student debt.
Somewhere in the mix of those two quotes is a process in which the lender (for current debt, that would be the federal government) has the right and ability to extinguish transcripts. Although, as written it appears there would be no mechanism in which partial payment would equate to partial credit; e.g., half of debt paid up should result in half of credits (on some schedule) remaining valid. Any degree would be void absent payment in full, since it is the culmination of all credits.
It's a mess all around, and inviting government intervention into it for the purpose of penalizing ill-equipped students is fraught with peril.
There is no quibble with getting government out of the business of lending. There IS quibble with allowing the government to be a broker or arbiter of remedies. This is one instance in which the mere entry into the racket was the crime; trying to parse out equitable results in accordance with traditional bankrupty law is just going to be an unholy mess all the way around. There is merit in wanting to find a just solution for those (YT included) who played by the rules, straight and lawful all the way. But, in this instance, the whole game is fraud all the way around. The only viable option is a total exit--total.
Option 3 is arguably the only solution. #2 being opt-in would cause all hell, because the education process is not much different than physical conditioning: once your trainer has run you through the process, the gain is in the bag. In the case of education, the degree is the nut, but the knowledge is variably valuable, making a strategic default valuable to the student in certain instances.
Education, properly, is partial payment up front and remainder upon certification. The first payment is for the time under instruction, the student being the risk taker. The latter payment is for the degree after demonstration of competency. It is not amenable to a debt construct, because the value is largely temporal; i.e., entry into a career path.
As to misrepresentation, there has been none by intent and only by inferred omission; given the duality of the topic--equity among borrowers and lending as a political tool--there is an intertwining of threads that can make a forum discussion somewhat disjointed. To address that point en toto, the following is recommended: take the whole concept of education lending and BEGIN with fraud. If it is partially true that ill-equipped (contractually incompetent) students were induced to borrow, then that is where the solution, and the debate, starts. To progress to downstream solutions is jumping ahead prematurely.
If industry fraud vitiates the contract, then the student is arguably a victim, in which case there is cause for redress. Seizure of degrees is contractual remedy, but the contract is void. Whence the redress? The kid is out four years of his life plus expenses. Who pays? Government (taxpayer)? This goes all to hell no matter which way it's cut.
If ever there was a time to take it all down to the ground and walk away, this is it.