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: 
Being put on academic probation was one of the best things that ever happened to me. I switched to community college, took art, music, and math classes, learned who I **really** was instead of who I **thought** I was, and eventually graduated with a Bachelor's and have had a lovely career doing things that are truly meaningful to me.

The bad grades I "earned" in my first two years at a university were trying to tell me several things: I was not at the right school. I was not in the right major. I was not in the right place in my life mentally and emotionally. But the grades alone didn't help me understand. The letter I got that said I was on probation was what I needed to get to understand that I was doing the wrong things. If professors had just passed me because they felt for me, I would probably be far less happy with my life right now.

I would argue that students are paying you to give them the feedback they need on their work and views, they are not paying you for credits and/or a degree.
Here in Germany universities are quite strict. After my daughter failed the very last maths exam three times, she was out.

However, strict does not mean heartless or planless. Her uni had an arrangement with the tech unis; one of them agreed to accept the exams she had already passed and enrol her in a similar course, for the third year. She was not alone in this.

This way all that time and investment was not lost.

You could organise a similar scheme with nearby polys or tech colleges, to take up your students, who didn't quite manage, but are still worthy of education. So everybody wins.