penguin1029
Most states in the US already have public university systems, but that isn't where most of the debt comes from.
Everyone wants to go to Harvard, Stanford, Princeton, etc.
The answers lie in educating them to make good decisions, and be there to help when good decisions happen to turn out poorly. The current dilemma is largely due to provably bad decisions (by students, banks, universities, government).
Are student loans the most pressing "bad decision" we have as a society? Definitely not. Is it a very electable topic? Yep
Loans will only be granted to students who have a track record of high achievement, parents willing to co-sign, and going into majors that make economic sense.
Enrollment will drop, universities will stop offering passion majors, mass layoffs in library science, academia, and college administrations (likely to the tune of 1M+ people).
In the end, students will be told by federal examination which school and major they get to pursue, or whether they get to go to college at all.
That's assuming the government is both effective and efficient in this process.
This is essentially how most consumer economics work.
If you get into Stanford but can't afford it, a loan seems like a good idea, but in reality the loan eligibility should consider the degree and future earning potential (along the same lines of how banks qualify other types of loans).
If we simply cancel student debt or remove private colleges' ability to charge a market rate the result will be no more private colleges (similar to other countries with fully publicly funded education). In these countries you typically have a national exam that determines where you go, or you have to lottery in to a school if it isn't in your district.