This is a good point, except that what's actually expensive is the credential. The stranglehold of the universities on the credentialing process would have to be broken (also, at a higher level, the stranglehold of the accrediting agencies on the accrediting process).
The exception is the professions where the law requires it. Employers don't have a lot of choice in those cases. But those jobs specifically have that in place to reduce the numbers to artificially increase incomes. They explicitly don't want more people.
You're probably not going to get a job in a Wall Street investment bank with a degree from Directional State University, much less with no degree at all.
If true, that tells us that they already have more people then they could ever hope to choose from. After all, they'd be desperate enough to look outside that box otherwise.
So what is credentialing another person really going to add?
You are assuming that these decisions are based on rational criteria.
They aren't.
Limiting selection to within degree holders very well may be irrational, but that's not what we are talking about. We're talking about the ability to fill the jobs that need to be filled. Since, as you claim, they have no need to look beyond those with degrees, then we know fundamentally that they already have every single person they need. That's basic arithmetic.
Again, what does adding another person with a degree bring?
When you claimed that "looking outside the box" was an option. It isn't. A degree from Directional State University might be intellectually equivalent to one from Harvard, but socially it's not even close to being the same thing.
You are arguing from the standpoint of humans as homo economicus, in which companies will hire the cheapest workers regardless of outside factors. That may be mostly true for a sweatshop factory, but it is a long, long way from being true for investment banks.
The cost of an education is already free though. If you cannot learn from those resources, perhaps you are not cut out for the fast-pace world of automation anyway?
> people would take more classes and become more skilled and get higher paying jobs.
Is demand really going to grow that fast? Programmers make up about 0.8% of the population. Programmers can do relatively well because they are, relatively, rare. But if we tripped the amount of people working in software, you would still be only utilizing under 3% of the population.
If your training efforts were successful, I would expect more than 3% of the population having the necessary skills. That would result in much lower pay.