Start buying up student loan debt and pooling them into Student Loan Backed Securities (SLBS). Tranche and rate them based on US News & World Report school rankings, sell these CDOs to wealthy institutional investors worldwide, then have your business partner short the shit out of them.

The closest I can think of is a short on QuinStreet (NASDAQ: QNST), which is a public lead-generation company highly reliant on marketing money from private universities. Online advertising firms in general would take a hit since education is a major category.

See the analysis and presentation here:

http://www.homethinking.com/brontemedia/2010/05/27/online-ed...

Alabama up until recently offered a prepaid tuition program that you could pay into, and then it guaranteed to pay your tuition at any Alabama public university. This was a public trust, and I don't know how similar other states' implementation is, but if there are any companies that offer the financial management of such a program, it would make sense to invest in that.

I suppose if you were really serious about making that bet, you could form a company that offered a similar investment service. Sell the product at a price that assumes the current rate of tuition inflation, and then rake in the cash when it doesn't happen.

There's not as much reason to bet against student loans as there was securitized consumer debt and/or MBS. This is because student debt is not dischargeable in bankruptcy.