Banks [...] can work out under what conditions they're
willing to loan money to students [...] If they
basically shut down all student funding, that doesn't
seem like a huge problem either
For deeper socioeconomic reasons, pretty much everyone in the truly lucrative fields like law and medicine is already quite well-off, and people who graduate from other degrees generally either end up in poorly-paying fields like academia, or else in careers that half a century ago didn't require tertiary education at all.
In general it's a lot easier to see the flaws of a new proposal than take notice of the problems with the status quo.
So doing things really gradually also has a cost.
I'm not convinced the politics of subsidizing education get better after that. There's a very high risk that a large and powerful swath of the country reacts to it with "I worked my ass off to pay for my kids to go to college, why should I subsidize yours?" The resulting increase in inequality is bad for society as a whole, but honestly it's a feature for most upper income parents.
It would probably put some pricing pressure on college, but the predictable knock-on effects are really really bad.
If they basically shut down all student funding, that doesn't seem like a huge problem either - it's a fairly bad model and I think society would benefit for from the pressure to find a better way to educate people.
It's a difficult question, it would have a lot of unpredictable knock-on effects. But subjecting the industry to market pressures seems a move in the right direction.