When students default on their student loans, does money just magically appear? When someone declares bankruptcy, does money just appear? Those things do hurt

When students default on their student loans, does money just magically appear? When someone declares bankruptcy, does money just appear? Those things do hurt all of us. Costs go up. Insurance costs more. Interest rates go up. Taxes go up (if the program was federally backed.) I am advocating for merit scholarships. Full ride. For a huge swath of people who demonstrate a reasonable level of merit. I'm not handing money to someone who flunks all their classes.