Question: The issue has crept up on me slowly over the last several years. I am increasingly aware of the massive debt that many of my students are taking on, debt which is far beyond the sort of debt that I incurred as an undergraduate in the 1980s. Because of this, in recent semesters I have found it somewhat difficult to fail students. Instead of simply asking myself "does this student deserve to fail this class?", I find myself asking "does this student deserve to have their life ruined?" In many cases (e.g. students who are already on academic probation) this is not much of an exaggeration. It is a very bad situation to find yourself in your early 20s with no college degree but $30,000 in debt. In some cases, I am aware that a decision of mine might be a contributing cause of a student ending up in just such a situation. I can no longer regard a failing grade as a relatively minor matter (like a speeding ticket).

How do professors reconcile their de jure role as guardians of academic integrity with their de facto role of being (at least in part) responsible for their students' economic future?

Answer: 
Take the example of a medical student. Do you want to pass someone who does not have the necessary knowledge to treat patients correctly? It is your duty to make sure that only the ones who know what they are doing will pass. This may be less strict in other subjects but the principle is the same.

--- EDIT ---
Another example where this becomes clear would be an airplane engineer or pilot that does not have the necessary knowledge (thanks to Mike's comment below!).
You're not failing the students. Assuming you performed your teaching job well, and you're grading them fairly, the students are failing themselves. They didn't study well enough to pass the class, or maybe they just don't have a talent for this material. Giving someone a passing grade when they haven't earned it is not fair to them, and it dilutes the value of passing grades for all the other students. If they need to use what you're teaching them in their career, they're not going to be as successful. The passing grade you gave them doesn't actually make them competent.

When you go to college, you're not buying a degree. No matter how much debt you get yourself into, you're not entitled to the diploma, you still have to do the work and pass the classes. And as a teacher, it's your responsibility to make sure they've done that before passing them.