I have to keep coming back to the idea that the problem is complex and the root of it is interference with free market forces.

The other notable aspect of government guaranteed student loans is that they cannot be discharged (eliminated) through bankruptcy.

If someone ends-up with too much debt they simply can't repay society allows both people and businesses to file for bankruptcy in a few different forms. One of them provides for restructuring the debt in order to make it affordable enough to pay. The other erases all debt in order to allow someone to start over (in the case of a business it would shut down).

Credit cards, consumer loans, car loans, home loans, they can all be erased through bankruptcy. Student loans? No. They cannot. You are stuck with them for the rest of your life.

Let me give you a plausible scenario. Someone goes into medical school and, a few years into it, has a serious accident and can't continue. They never graduate. Let's assume at that point in their studies they have accumulated $200K in debt. Well, they have to pay for that. And they cannot eliminate it through bankruptcy. They are not doctors and can't earn an above-average wage, and yet they are slaves to their nice fat government-guaranteed, government-distorted loans.

Universities are guaranteed their money because the government guarantees the loans and the government makes sure you will pay until you die if that's what it takes.

In your scenario, if the government provided no guarantees and private lenders offered loans, they would not loan exorbitant amounts. Their loans, as is the case with any consumer loan, would be subject to discharge (elimination) through bankruptcy. Lenders would not take such risks without a tremendous amount of assurances as well as vetting of the candidate. There would be tremendous downwards pressure on tuition simply because lenders would not be open to providing $50K to $60K per year for most degrees, if any.

From my perspective no degree should cost more than what someone WITH THAT DEGREE can pay in, say, ten years. In other words, a software engineering degree would cost more than a history degree, because the earning potential of the student would be greater in the first case.

Another way to perhaps do it is for universities to take 10% of someone's salary per year for, say, ten years. That's it, that's their payment. The logistics would need to be worked out, but, in essence, universities would have to compete in the open market by graduating highly qualified professionals.

And yet the problem continues to be the same: Universities can only accept so many people. This is true everywhere in the world, where free universities filter people through extensive entrance examinations. Forcing education to be free isn't necessarily going to solve any problems in terms of making education available to more people. Not unless you now start over-populating universities because they are "free".

Here "free" is in quotes because the concept is vacuous. There is no such thing as free. Someone always has to pay for it, if anything for the simple matter that university employees and professors have to earn a living and it cost money to run the schools.

Every single "free" government run program in the world runs into exactly the same problem: Quality deteriorates as the amount of money available per economic unit goes down. The easiest example of this are "free" healthcare systems, where care is limited, people have to wait a very long time to be seen, quality of care and testing is substandard and their very existence depends on drugs and product developed in non-free systems (places like the US).

If universities in the US become "free", the question is: Who pays? The government? So, each university is allocated an amount of money per student? We are back to tuition, this time paid by government. Well, then, how much do we pay? Do we pay MIT the same as a local university? No? Why? Why is it fair that universities are not paid the same per student? If a local university gets $10K per year, MIT should also get $10K per year. It would not be highly discriminatory to give MIT $50K per year and a local university $10K.

You see, as we start to dive into the realities of these not-so-brilliant ideas we run into myriad problems. Everything sounds fantastic in front of a microphone during a political speech. And yet, reality tends to be nowhere near to what is being promised. It never is.