A big thing that he didn't mention: Income-based repayment programs (particularly the new SAVE plan) and Public Service Loan Forgiveness (PSLF), while certainly well-intended, make the cost of college essentially irrelevant for people who can reasonably expect to benefit from those programs. And so the colleges up the bill. His 3 proposed solutions don't really deal with this. Obviously people on IDR or PSLF don't need to declare bankruptcy just because of the loans. And if the colleges had to carry the risk, the risk would be far less than imagined if these programs still exist in the same way as today: the federal government guarantees it will write off the loan of anyone who works in non-profits (which are about 10% of all jobs) for 10 years, or anyone who makes a small minimum payment for 20-25 years with SAVE.
The SAVE income-driven repayment plan is a big deal that will make the cost of college far worse. What you have to pay is 5% of income above 225% of the poverty line. A family of 3 making $80k pays $104 a month - it doesn't matter if they had $10,000, $100,000 or $1,000,000 in loans. If you are not planning to be in a very high-earning field, why wouldn't you borrow the maximum? Why wouldn't the colleges charge the maximum? This amounts to a giant subsidy.
The SAVE income-driven repayment plan is a big deal that will make the cost of college far worse. What you have to pay is 5% of income above 225% of the poverty line. A family of 3 making $80k pays $104 a month - it doesn't matter if they had $10,000, $100,000 or $1,000,000 in loans. If you are not planning to be in a very high-earning field, why wouldn't you borrow the maximum? Why wouldn't the colleges charge the maximum? This amounts to a giant subsidy.