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I'm all for making college less expensive for students but, as good as this sounds, I think we need to enact some controls on the price of school before measures like this will be helpful. If credit becomes cheaper for borrowers, universities will just raise their prices. The economics are in the universities' favor here and they'd happily absorb more money to grow their administration.
It seems like getting some controls in place might be doable if democrats were to push for the. Republicans might be game to regulate the cost of university attendance since it would reduce the flow of money to the evil leftist universities, but maybe they'd see that as anti-capitalist?
The core problem is one you've narrowed in on: There's a positive feedback loop between schools and lenders to increase costs forever.
Student loan debt is (almost) impossible to discharge in bankruptcy. That shit will follow the student for the rest of their life, until it's paid off or the student dies. This is accomplished by allowing private lenders to make "federally-backed" loans, in which there is a quasi-private lender who is, by statute, able to collect interest on the loan, but has almost no risk because, should the student fail to pay, the federal government steps in, pays off the lender, and assumes the debt, at which point, the student still has to pay, but the lender got their money back, plus whatever interest the student had paid until that point.
I mean, if you were in the student loan business, why wouldn't you lend as much as possible? It's literally free, guaranteed revenue for decades. You'd be stupid not to enter this almost zero-risk business.
Meanwhile, while lenders want to lend as much as possible, they can't hand out insane loans for education if education costs little. Schools notice that students have no problem paying large sums of money, so.. they increase tuition, books, add fees, and suddenly, schools are bumping up against what students' would be able to borrow, so those lenders are more than happy to accept more risk-free revenue in the future in exchange for a pittance now, and suddenly, we have a feedback loop that spirals ever-upwards.
The absolutely quickest way to solve the problem is unwind the various bankrupcy laws that makde student loans essentially bankruptcy-proof. Lenders should have to do things like credit-worthiness checks on students.
The best way is to simply provide a free college education for every student that wants one, just like we do a high school education. The entire idea that you should have to assume a crapton of debt just to learn something is insane. The "student loan industry" shouldn't exist.
Why not go a step further and make huge education mandatory? We used to consider high school optional, but eventually we realized the immense value that comes with an educated society.