"The deputy was holding a warrant to arrest Mr. Stearns for not paying $4,024.88 owed to a unit of American International Group Inc."
Wrong, the warrant was issued for not showing up to a court hearing as it says in earlier in the paragraph. This sentence is journalistic embellishment.
"Emmie Nichols, 26 years old, was arrested in June at her mother's house after lawyers for Capital One Financial Corp. won an arrest warrant against her for skipping a court hearing about $1,159.87 she owed on a credit card from the company."
Being arrested for skipping court dates != being put in jail because you didn't pay your debts. I am sure that there is fraud in the system, don't get me wrong but this sort of journalism feeds hysteria. Hysteria is the enemy of reason.
The real story here is not that students are getting denied their transcripts because they haven't paid their loans, it's that these companies are able to make these risky loans that are guaranteed by our (the USofA) government. The housing bubble happened for the same reason, and and this bubble is bigger and has very little real value to reclaim.
This will continue to happen until the finance people say things like "sorry, I am not going to finance your history degree to the tune of $80,000 as I don't think you will ever be able to pay it all back".