Standard market theory is that rational actors will make optimal decisions. In theory, that the effects happen in the future shouldn't matter. Indeed, almost all market choices are prospective. Cars are a good example of something where there's generally no up-front penalty for a bad decision, but people buy cars just fine, and it would be weird to say the market isn't in play there.

The problem is that actual humans are pretty different from homo economicus. Iterating on experience is most of how we learn. But people don't really iterate with education; as structured, it's way too big.

I think the way to solve it isn't some sort of system of up-front penalties. Personally, I think the problem is that education is treated as a one-and-done thing that happens at the beginning of our lives. But that's when we know the least about the world and ourselves. I think education should be an ongoing process mixed in with work.

Freakonomics did a recent podcast [1] which examined different methods of student loans and payback programs. One idea was letting businesses "invest" in students directly by paying for tuition, with the student agreeing to payback terms upfront, thereby shifting the risk from the student to investor.

[1]http://freakonomics.com/podcast/student-debt/