Colleges need to have some skin in the game. Lenders should require that colleges pay out at least a small percentage of the loss when borrowers default.

And instead of a single flat interest rate for all student borrowers, actuaries should set interest rates based on the school and major. So students entering programs that produce a lot of defaulters would pay higher rates. That would provide a clear market signal indicating we have a surplus of people with that education, and encourage students to look at other options.