[dursk]

Why not? The whole point is that yes, the kids are struggling to choose a major, and a large number of the time they make a bad decision. If their ability to receive funding was dependent on what they chose to study, then the idea is that more students will choose more productive and beneficial majors.

And the problem you pose is easily solvable. They have to re-apply for loans every school year. Maybe pretty much everyone gets funding freshman year before they declare, but when they re-apply for sophomore year their major is taken into account. If you switch majors mid-year, then when you re-apply the following year, you get evaluated. Or if you received funding for a given year, you are not allowed to switch your major during that year.

EDIT: It's really not all that different than home loans being determined by income, credit history, etc. If you are going to ask for a $500k home loan, you better have the income to pay it back. If you are going to ask for a $100k student loan, you better have the projected/expected future income to pay it back.

[sokoloff]

Re-apply every year?

What reasonable assurance do I have that my kid won't get denied for his senior year, thus being $100K+ in debt and without a degree? (which is probably worse than the current federally subsidized system)

What assurance do I have that the terms won't get dramatically worse by a private lender for the junior and senior year and for this to be driven by "Now I've got you by the shorties" rather than by "basket weaving is not a lucrative career"?

What effect does that have on smart students of middle-income families who don't have the resources to pay for college without loans, yet make too much to get sufficient need-based grant money?

[TheOtherHobbes]

Your approach confuses economically rewarding courses with socially beneficial courses.

Part of the problem is that resource extraction and redirection activities are drastically overvalued, while activities that generate lasting social value are drastically under-rewarded.

You can't expect markets to correct this, because markets are part of the resource extraction/redirection system, and will always overvalue themselves and undervalue competing social mechanisms.