"Fixing the lending problem might influence the overspending, but fixing the overspending would solve the problem much more directly."

You're missing the point. The overspending is a direct result of the lending problem. Lending is the root cause of the overspending problem. Students choose schools with lots of amenities because it's so easy to get loans, so why not? Because of this, schools have to continue to build plush dorms and state of the art fitness centers in order to keep their enrollment up. This, of course, drives up costs, which is passed on to students via tuition, who just continue to pay for it all with more readily available loans.

A particular university can't just cut spending, because it would put them at a huge competitive disadvantage with everybody else. Only by reigning in lending will costs stabilize.

Fixing the lending problem might influence the overspending, but fixing the overspending would solve the problem much more directly.

You're basically saying let's ask people not to accept free money that's being thrown at them. That's not impossible, but I think restricting bad loans is more compatible with human nature.

How are you going to restrict bad loans without asking people (the government) not to accept free money? It's the same problem.

Sorry, I meant the universities are accepting free money and that's why they won't reduce prices. If the government refuses to make "underwater" loans on degrees that are not worth the cost, we should expect prices to go down.