>ISAs are securitized and resold. Lambda has zero incentive to do anything above and beyond pushing students through some percentage of the program.

I disagree with your analysis of the incentives here. The price people pay for tomorrow's securitized ISAs depends heavily on how well today's ISAs pay off. It's a delay in the feedback loop, but it isn't broken.

That being said, this incentive alone is likely weaker than the prevailing incentives in for-profit education, which seem to encourage saving a buck wherever possible and over-promising, under-delivering.