For a normal loan, the game theory pits the lender against a future bankruptcy court, and they have to decide if they'll get more money by reducing the debt, or

For a normal loan, the game theory pits the lender against a future bankruptcy court, and they have to decide if they'll get more money by reducing the debt, or if going to court is the best solution. Not so for student loans; in the U.S. they typically cannot be reduced in bankruptcy court. So the choice becomes a simple one of cooperate=1, defect=2. Well, okay, it's not that simple. We don't yet have hereditary debt, so the debtor can still choose defect by killing themselves, reducing the amount the lender can collect. Debtors usually consider the cooperation strategy the better one.