So kids that can't afford/qualify for a top school would also face much higher student loan interest rates. Humm... that doesn't seem that much different from "

So kids that can't afford/qualify for a top school would also face much higher student loan interest rates. Humm... that doesn't seem that much different from "tax the poor" style of economics. Perhaps schools with a lower default rate should get a higher interest rate... the banks are leaving money on the table. Students attending schools with a higher default rate should get the lowest rate and more government support (grants/bursaries/scholarships). Or perhaps the student loan "industry" should not be focused on how to make the most money from students. It should be focused on higher graduation rates, higher paying employment for graduates, and perhaps even employment in strategic fields (i.e. increase the amount of loans available for engineering, compsci, whatever fields will be important in 10 to 20 years). And private industry (aka the banks) should not be in the business of student loans at all. It should be 100% government funded and run, with the goal of being a non-profit. It's hard for me to see any added value that private industry brings to the table for it's "share of the profits" (do they help sell a student on getting a loan? is servicing/tracking a loan so complex that the gov't couldn't easily run a loan servicing application?). Profit is the incorrect incentive for student loans (again it should be graduation rates, higher paying employment, perhaps even employment in strategic fields).