A large fraction of student borrowers are not repaying their loans, as documented at https://libertystreeteconomics.newyorkfed.org/2019/10/who-borrows-for-colle

A large fraction of student borrowers are not repaying their loans, as documented at https://libertystreeteconomics.newyorkfed.org/2019/10/who-borrows-for-collegeand-who-repays.html https://libertystreeteconomics.newyorkfed.org/2019/10/who-bo... . In a private loan market, lenders would monitor how students are doing in college when deciding what interest rates to charge each semester or whether to make further loans at all. This would encourage college students to attend class and work harder.