There are plenty of mechanisms to counter this. One is direct funding of colleges as we did before via state and Federal funding. Another is to establish a feedback loop where loan guarantees and funding for the institution are a function of their students default rate: that way if the education doesn't lead to jobs then the school gets less money.
That will lead to universities only accepting students that would get jobs after graduation, which would probably kill many majors that don’t have high employment rates.
Not really; most university graduates can find jobs relatively easily. Unemployment among young diploma-holders in the US is very low, and the diploma premium to income is high, though of course varies by the major. What will rather happen is that less-well-paying majors will become cheaper.
We don't need millions of people learning unproductive things for excessive prices.
Obvious people who can afford to learn something for fun can do so, and knowledge that is socially valuable but not economically valuable can be supported by government or private patrons who see the social merit. Both are better than duping kids into huge loans.
