[ThrustVectoring]

>I think another part of it is that even low level office jobs now require some sort of degree simply because everybody has one.

This is the key problem - education is often positional good, since not every job seeker can be better educated than the others.

>One solution might be to only offer loans for degrees that lead to a job (doctor, lawyer, architect etc.) and consider things like History or Music a luxury.

Better is to make asking about and providing your college background illegal, with some exceptions for doctors/lawyers/engineers/etc.