I think the number of athletic "scholarships" that a program is allowed should be decreased as the graduation rate decreases.
The NCAA is taking steps in that direction. One problem is that it may cause coaches to have to game the system and make decisions that are not in anyone's best interest just keep all their scholarships. Examples abound. Under currently proposed rules, programs would be penalized if a player in good standing transfers to another school. Similarly, penalties would be imposed if a player leaves school as an underclassman for the NFL draft, a pretty good career move I think. Drafted players would count against the program even if they returned to complete degrees.
In addition, coaches may be reluctant to dismiss players who are disciplinary problems as they would take not only their scholarship, but scholarships of future players. Finally, there are many borderline student athletes for whom this scholarship is their chance to succeed in life. Some don't make it, but some do and flourish. It would be a shame to deny them that chance, but these rules would cause a coach to do so to protect his program.
The intent of the proposed rule is good, but I believe it (like so many other regulations) would have so many harmful unintended consequences that on balance, it would be a bad idea. Remember, campaign finance reform sounded like a good idea too.
The only real solution is for the college or university to hold the coaches accountable for performance in this area. If a college wants to be known for a 25% graduation rate, let other coaches use that fact against them in recruiting. I think the proposal reflects cowardace on the part of the college presidents, who need to NCAA to manage this for them since they are unwilling to hold coaches accountable themselves.
Just curious... someone mentioned schools like ND and NW as having graduation rates in excess of 90% for their ballplayers. Does anyone know their rate of graduation for the student body at large (within a five year window)? That seems a relevant point of comparison rather than other colleges. I would guess that at most state schools, the graduation rate for student athletes is as high as for most incoming freshmen, but I don't have the data to back that up.