No surprise — default rates on college loans are rising. What to do about it, if anything? Some want to make college loans dischargeable in bankruptcy (currently they aren’t), but others see drawbacks. CCAP’s Daniel Bennett gives a good overview of the dispute in this this Forbes piece.

Bennett wisely suggests that the ideal solution is for the government to get out of the student-loan business, but also advances an interesting half-way proposal, i.e., making schools at least partially responsible for student defaults. That would create some important incentives that are presently lacking: an incentive to accept only applicants who seem likely to derive some lasting benefit from enrolling (as opposed to taking virtually anyone, as some institutions do) and an incentive to keep faculty and students from just coasting along with little or no effort.