re: At least half of students defaulted or failed to pay down debt within 7 years

My solution is to allow the student to pay back the principal of their loans with pre-tax dollars.

You can already use pre-tax dollars to pay for tuition beforehand, my solution would allow you to do so after the fact from either a 401k, IRA, FSA, etc. It's your money, the only person losing out on the tax dollars is uncle Sam who is already making money off your loan interest anyway.

As it currently stands you can only pay off student loans with post tax dollars and after paying off student loan interest first. That makes paying them off an expensive proposition.