They tend to sell off the loans to collection agencies. I know people who don’t pay and have no intention of ever paying and nothing happens.
Speaking from the point of view of a millennial former leftist, I can almost guarantee that most young folks with left leaning sentiments are merely misguided, rather than wholeheartedly bought in to the myths of central planning and the labor theory of value. If you spent some time to understand what their ends actually are, and explain to them that liberty is the best means, rather than forced collectivization, they will listen.
Also, I don’t think you can really blame individuals who have been raised with this sense of entitlement. It is exactly how the state wants them, crying when the tax-funded teat is ripped from their mouths. Look at the situation is Greece. Several generations of the “what about me?” mentality are ready to tear the country apart if they don’t get their handouts.