Step 1 - end government guaranteed student loans
Step 2 - Allow student loans to be cleared by bankruptcies.
Student loans are a wealth redistribution scheme designed to take money from the middle (and lower) class and give it to the elite.
I couldn’t agree more with both of your steps. The result will be more stringent screening (elevated somewhere above “can you fog a mirror and digitally sign documents?”) and will raise interest rates (to reflect the added risk to the lenders). Both would be EXCELLENT outcomes.
The problem is neither is likely to happen. Universities would crumble without the scam cash flow they have used to build huge buildings, endowments, programs, payrolls, and on and on...
I’m not sure how this gets solved without bilking us all (which really won’t solve the problem - see Bank Bailouts exhibit for an example), or crashing the system.