The premise here is simple: treat students like actual investments. Banks and loan companies do this all the time with small businesses: they dictate terms and demand collateral. If you mess that up, you pay for it. If you walk in without the right answers, you leave with nothing minutes later.
Banks and loan companies could easily offer student loans based on where the student has been accepted (party schools have higher interest rates, whereas small, focused schools get lower interest rates because graduation rate is higher). Some community colleges might have the lowest interest rates of all.
Further, these lenders could declare certain majors off limits. Nursing, IT, engineering, and accounting? These offer low interest rates because employment rates are high with less turnover. Education is a break-even at worst. But good luck getting financed if you want a Master’s in Gay Literature: no one is hiring, which means no chance of paying your loan back. Sound cruel? Look into what lenders do to small businesses when they owner has no clue how business works.
RTWT. What? Expecting borrowers to show responsibility? Why, that's just crazy talk.