Well, the obvious next step would be to revise the credit score guidelines to lower the penalty for a student loan-related bankruptcy, right?

I don't see those individuals having any easier time getting credit with a massive, unpaid student loan on their credit profile.

At the end of the day, someone has to foot the bill for excessive student lending for college. Clearly, the lendees don't have the money to pay them back, so your choices are:

A) Lenders (via default or forgiveness)
B) Taxpayers (via a massive bailout)