I think the situation with grade inflation and loans, and the set of incentives in higher ed is a little more nuanced that you're portraying here. Universities

I think the situation with grade inflation and loans, and the set of incentives in higher ed is a little more nuanced that you're portraying here. Universities have always had to compete for students, and the argument that the incentives pushing for student retention would disappear if student loans didn't exist seems speculative and unsupported.