Well, schools have the incentive to do this today, already. Any student they take on is additional revenue, even if they perform horribly/are not qualified. Yet we don't see most schools lowering standards for revenue purposes.
But there are always second order effects and perverse incentives to any system. I agree if it were enacted as I stated that outcome could be something along lines of what you're suggesting.
Of course, we already have that now with the university of Phoenix type of schools.
I meant moreso aligning incentive of school and student. But exact mechanism of implementation would need to be refined to avoid any obvious perverse incentives
