That is the question Duke Cheston explores in today’s Pope Center piece. That is to say, how would the incentives of college officials change if they stood to lose some money when students they had admitted with federal loans to help pay for their education (or maybe just their “experience”) later default?

I see this as a second-best solution. The federal government should get out of financing education entirely, but until such time, a rule that put some of the risk on colleges would have salutary effects. For one thing, it would create a new and quantifiable metric for evaluating the performance of college leaders. Governing boards could look at the amount the school had to pay out because of its improvident admission of poor students and/or its failure to give them a serious education. The change in incentives from processing through as many students as possible to considering whether individuals would pose a financial risk to the school could be dramatic.