If the government ran its student loan programs the way banks do, Ivy Leaguers would probably get a steep discount, those at state universities would pay a bit more, and many at community colleges and for-profit schools would be deemed subprime borrowers.
No college degree guarantees one will be able to afford to pay off their student loans, but Ivy League borrowers rarely default on their debt: Just 1% of Harvard University students defaulted within three years of their loans coming due in 2009, according to Department of Education data released last week; and at the higher end, just under 3% of Columbia University alumni defaulted. Compare that with for-profit schools such as the University of Phoenix, where 26% of students defaulted in that same time period — nearly twice the national average.