Giving Compass' Take:

• Mary Clare Amselem argues that colleges need to change their funding structures to undo the damage caused by the college admissions scandal. 

• Do you agree with her underlying assumptions? Is this plan both necessary and sufficient to address the credibility issues colleges are facing? 

• Read about efforts to find a new student loan repayment scheme

American colleges and universities have a growing credibility problem. The recent college admissions scandal has only reinforced long-standing suspicions that the admissions process is rigged.

Meanwhile, the schools churn out more and more graduates burdened by massive student loan debt who are all too often unprepared for success in the job market. The Center for College Affordability and Productivity reports that nearly half of all working college graduates are in jobs that don’t require a college degree.

Although students, taxpayers, and parents are rightfully questioning whether college is worth the ever-rising tuition, colleges for the most part have made no moves to demonstrate a commitment to delivering value for money. That’s because colleges face few consequences for providing low-quality education.

Instead, Washington gives them a blank check that insulates institutions from being held accountable. Colleges have little incentive to ensure their graduates are happy with their education once they walk off campus.

At the heart of the problem is the federal government’s near-monopoly on student loans. Reduce reliance on federal loans and make schools have some skin in the game, and colleges will become more accountable. Paying for school will become more manageable as well.

One alternative to federal loans would be income share agreements. Students entering these agreements would have the cost of their education covered up front, by either the school or a private lender, and agree to pay back the cost of their education from a fixed percentage of their future earnings.

Read the full article about a plan for recovery by Mary Clare Amselem at The Heritage Foundation.