Let’s make all student loans dischargeable in bankruptcy, but instead of the taxpayers taking the hit when student loans go sour, colleges should absorb the loss, or at least a portion of it.
This would incentivize colleges to focus on providing educational value and help their students launch a career–knowing that if they fail in their mission, there are real consequences. Maybe then colleges would be more attentive to helping their students succeed.
Daniel Bennet, “When Good Loans go Bad” (http://www.forbes.com/2010/05/25/student-loans-bankruptcy-leadership-education-bennett_2.html)
Pretty interesting concept. It certainly would be opposed by most higher education institutions I believe. I imagine that it would severely alter U of Phoenix and the other for profits recruiting efforts.