I agree. Interest rates are way too high on student loans. Part of this is due to the fact that so many borrowers are in default. I can't remember where I read about this, but I believe other countries are much more aggressive in collecting from borrowers in default on educational loans. Garnishing wages, etc.
At the same time, the system itself is set up for many people to fail. If the government allows anyone to borrow money to go to school, and study whatever they want, regardless of employment prospects, you are going to have a lot of people that can't repay. Part of this is on Universities that price these degrees and/or allow students to borrow more than is necessary. Someone with plans to become a schoolteacher should not be able to take out $100K in student loans.
I do agree that the debt-reduction program issue needs to be fixed. A lot of these people borrowed with the assumption that they could have it forgiven down the road. A lot are being rejected, but I'm not sure if that's because the borrower wasn't compliant or because the rules are not well defined or communicated. Maybe it's both.