This is the root of the problem. Anyone can get a degree regardless of aptitude. Loans will pay your way in, the school will do everything in their power to stop you from flunking out.
We have to take a lien on loans for cars that in some cases are much less money than school loans.
Maybe make schools take some brunt of the loans. If they feel so strongly that their degree is worth it, its like they should back you as an investment.
Several schools are investing in their students, using the Income Share Agreement (ISA) format. Students do not pay any upfront tuition, the school takes care of it. Then, students only pay when they find a job with a % of their income. Alternative education[1] but also more traditional college are offering this[2][3].
Maybe make schools take some brunt of the loans. If they feel so strongly that their degree is worth it, its like they should back you as an investment.