How does your argument fail to also apply to student loans?

People can decide on what terms they want to loan money to, or invest in, a business, based on how likely they think it is to succeed. And if they guess wrong, tough luck, they should've been smarter. The incentive structure here is to make it easier to raise money with good ideas and harder to raise money with stupid ones.

This incentive structure doesn't exist with student loans: student loans are unconditional, and with terms that don't take into account likelihood of payback.

When companies declare bankruptcy they have to liquidate their assets and pay back as much as they can. How is it different from student loans?