The exams could then also show percentiles, so even if you were self taught you could be ranked against Ivy League students.
Cons to this approach would be the same issues that exist with standardized testing today. Emphasis on only learning to the test, high stress make or break testing (although this already exists with the SATs and other exams). I'm sure there are also a number of other cons.
Pretty much all private student loan borrowers pick off the "good bets". Because the government rate is the floor.
This was Sofi business model. I remember looking at their securitizations and most were graduate school loans for top schools( Wharton, Harvard, Columbia, etc). It wouldn't be rare for an entire securitization of thousands of loans to have no loans even 30 days delinquent. And they paid back quickly too.
> Investors received a financial return and borrowers received rates lower than the federal government offered. The company sought to minimize defaults by focusing on low-risk students and graduates
[Citation needed]
We already know who the "good bets" are. They're the rich kids. And if you think "income sharing" and the private sector will drive rates down from a federally-subsidized ("predatory") rate, well, I don't know what to say.
I certainly don't think burying underprivileged students under a mountain of debt at graduation is a good thing. I'd very much like to see costs come way down, and I do agree that doing something about the loan system is a piece of the puzzle. But the reason the underprivileged are taking on this debt is that they're attempting to move up, in a way that avoiding debt by avoiding higher education will never achieve. Unfortunately, higher education has become the only way to hang on to an otherwise-falling standard of living; wage stagnation despite increasing education level.