There will be some short-term hardship.
I agree. This isn't going to be quite as easy to climb down from as some folks imagine. No plan I can think of won't be unfair to somebody, so the question is, how to minimize that?
The people who financed their own educations or have paid off their loans by now are the ones who, very unfairly, stand to lose the least by restructuring this thing, since they're more or less financially stable by now and never mind how hard they had to work to get there. I'm one, it sucks, but what can you do?
The ones who stand to lose the most are the ones who haven't entered higher education yet and are likely to find (1) tuition and fees still at a high level, and (2) no loans available to cover them. For me it wasn't that hard to finance my own education (it wasn't easy, either) because tuition and fees hadn't experienced the bloat yet. Covering today's levels of those with a part-time job is just about impossible. They're high because they can be, and if we make it so that they can't be by dropping the money supply they'll still start out high until the institutions can manage to draw down administrative staff that won't, hopefully, be needed anymore. That process will be hastened by suddenly smaller entering classes, and that means that a whole lot of institutions are going to run in the red for the interim.
It's going to take a while to fix the system and in the meantime the oncoming students are going to feel like poor kids staring at a store window who will never get inside. That hardship is going to make my own challenges seem petty, and I'd like to avoid that if we can.