Why not just do away with the "student-athlete" fig leaf anyway? Let the kids be pros, and if the pro teams want a farm team, the university can give the team naming rights.
Some very simple bullets to fix the system:
1. Allow full free market compensation for players. Whatever the market will bear. And let players have agents.
2. Let players transfer freely without having to sit.
I think there are a couple threshold issues that ought to be raised here:
1. The two big college revenue sports are unnatural. Nowhere else in the world are minor-league competitions that big and that popular. There is some gravity-defying special sauce to US college football and men's basketball.
2. The two big college revenue sports are good! This is a value judgment of course, but I would imagine everyone on this board would agree that emptying the stadiums and turning off the TV cameras would be an outcome worth avoiding.
Those two collide, in my mind, when we get into the more "it's always been a pro sport, just make it a pro sport" type proposals.
That is especially true when it comes to transfers. I don't claim to know the exact contours of the "secret sauce" that makes college football and basketball way, way more popular than any other minor league in the world, but there seem to be three key components.
1. It's traditional. The teams play old rivals in old building on old campuses just like they did 30, 50, 70 years ago. There's an unchangingness that appeals to us. Conference expansion, playoff systems, and things of that nature threaten this.
2. It's local. The biggest college programs by and large come from relatively populous places that were either historically untouched by pro sports or even remain so today. They're rooted to their institutions, they don't move. The neutral site epidemic in both football and basketball threatens this.
3. It's tribal. You only go to college once. For both fans and players, you can go on and do many different things in many different places in your life, but you can never change your connection to that institution and that team. The transfer epidemic threatens this.
You keep those components, traditional, local, and tribal, and college sports will survive whatever you throw at it. Get rid of them, and the devil magic that keeps college sports way more popular than they have any objective reason to be disappears.
Compensation flowing to players goes against tradition (making it legal anyway), fair, but not as much as codifying the constant movement of players from one school to another would destroy the tribal element of having "your" guys.
For me, rather than liberalizing transfer rules, I would try to go the other way, trying to force coaches to stick with and develop the guys they recruit, rather than just Creaning guys they don't want.