I agree with everything you've said, and you seem like a very motivated, hard-working person. I am not referring to people in your position.
My point is, why not make loans merit-based, like they used to be? In other words, a world where banks were actually taking a 'gamble' by giving out the loan, and thus, would only give loans to students that they knew had the academic ability to graduate, and eventually be able to pay them back. I have not had the pleasure of chatting with you yet, but given what you have described so far in your post regarding your job/career, I am willing to bet that you were at least a reasonably decent student in high school - and I'm sure you would have qualified for a merit-based loan, had you decided to pursue college after high school. I apologize if this is an incorrect assumption.
What is happening now, with freely providing loan money to a 1.5 GPA high school graduate to go to XYZ University of Profit, is that banks no longer have a risk factor in lending money. This student will most likely dropout of college, or barely graduate. The banks can rest on their laurels since they know they can garnish this student's wages, social security checks, etc. etc. In other words, it's just another form of predatory lending.
This is an injustice for this segment of students. This is no different from the 2008 sub-prime mortgage crisis, where people were granted housing mortgages that did not correspond to buyers' incomes. In many ways, the current student loan issue represents a safer scenario for the banks, since student loans cannot be dissolved in bankruptcy, unlike housing mortgages.
Many economists state that the student loan market will be the next financial bubble to burst.
There are many campaigns now where students describe being deceived by financial aid officers, and being approved for loans, despite the lenders being fully aware that it will be impossible for them to pay it off.http://studentdebtcrisis.org/outwithstudentdebt/
Everything you say is true (including the fact that many jobs today are present that require college degrees). The solution, however, is not to simply flood higher education with more students. The solution is to improve the K-12 education system, which will naturally result in more entrants to college.
A lot of people in this thread are presenting very idealistic solutions - such as removing private colleges/universities. How exactly are you planning to convert a private industry (or at the very least, any private industry) into a government-run industry, without changing the basic premise of our financial system? The better question is, is this even realistic? (Given that most Americans enjoy having the freedom of private choice).