If you fail out, it's not just your problem though. It's also the taxpayers who paid for the school that the student wasted.

That remains true whether that's a Scandinavian model of fully-paid schools, a US public university model of a partially taxpayer funded & partially student funded or even a private university if it ultimately results in a taxpayer funded loan forgiveness or other subsidy.

Rate of dropouts is probably priced in. Plenty of people in the U.S. drop out of public education before they've completed it as we..

I don't think you're disagreeing with me here. It's just that your school doesn't care that much if students fail because of their own negligence. Mine does, because that looks bad or something.

I totally agree with your school's stance, but I acknowledge tha the current financial incentive structure prevents my school from having the same.