"Maybe they should make it so that degree can be legally reposessed by the bank ... and any future employer, seeing lack of degree would know to inquire about the details."

This wouldn't work. They can't repossess the knowledge in your head, or the fact that you did EARN a degree, even if you don't HAVE one. Employers are mainly interested in what people know and can do, not how their finances have been in the past (though that may come into play for questions of trust).