Student loan defaults are becoming a serious problem. To encourage educational institutions to provide better career services to their students and be more transparent and honest regarding their graduates' employment statistics, it is proposed that for every student that defaults on a student loan, the corresponding educational institution shall have its total federal funding cut by 0.1%, up to a maximum of 10% per year. Any institution that has had its funding reduced through this means shall be ineligible for a funding increase of any kind from the federal government until all student loan accounts associated with the institution are no longer delinquent. This policy will encourage educational institutions to put proper emphasis on career services and guidance.
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