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Economic Crisis to Help Wipe Out Student Loan Debt? Credit to be Ignored?

After listening to Ron Paul's latest Straight Talk and reading the comments, I am once again reminded that things are very likely to get very bad. A standing prediction is that within the next year things will finally crash.

So, I pose this question to those with the knowledge. What happens to all the student loan debt once the economy crashes?

With the economy already bad, my age group of late teens to mid-20s, has one of the highest unemployment percentages in the US. Due to this, there is currently some defaulting happening, but nothing terribly bad. When the economy really does a true crash though, many many people will end up losing their jobs and the situation becomes even worse with a large majority of student debt being defaulted on over the next 3 years. This will utterly ruin credit ratings for a huge chunk of the country, meaning a vast ripple effect that will take place where all these up and coming people have trouble buying anything from a home to a car in the future. Credit ratings are also often checked when employers are looking to hire someone, this would mean a vicious feedback loop where they arnt able to pay off the loans but because they cant pay off the loans, they cant find a job to make money to pay them off.
What will happen when you have something like 30-50% of student loans being defaulted on?(numbers chosen as just a large example, I do not know the true extent here)
This means that those wishing to sell items which would typically have a credit rating check would have their market shrink even further after the effect of the economy. Would this lead to credit ratings being increasingly ignored in the face of so much bad credit?

I have heard before that the student loan bubble will be one of the next things to burst, but have not thought about it indepth much and never read much detail on what would happen. Obviously having it burst would have a huge ripple effect across everything else because of how credit ratings would be affected.

Anyway, the entire point here is to gain insight from those with knowledge on the possible repercussions of such a thing happening.
While I currently have a job, it is only part time and isnt paying for too much. This is far short of the engineering position I would like.(if any of you out there work for a company hiring entry level electrical engineers, please, I beg you to hire me)

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I am bumping this because the

I am bumping this because the other college thread popped up. It does make sense that college debt may be forgiven, but things would have to get pretty bad.

To climb the mountain, you must believe you can.