Continuing the example, I'd say that at the non top-tier level it's pretty important to have a degree if you want to make more than 60k a year. It's really hard to justify charging more than 20$ an hour to parents of prospective students if you don't have some sort of degree. I'm assuming that most music majors will go on to teach. Granted, this isn't the only thing you need to be successful, but it's a pretty important component. I doubt that anyone who is going to succeed at an instrument could get the information they need from a community college. It sounds elitist, but pedigree is very important in music. The community is not particularly open about sharing information, so very few people (relatively speaking) really know what they're doing. And they tend to keep it to themselves/students.
Additionally, music is pretty unique in that very few people study music in college without having already studied it seriously for 10+ years prior. Typically, if you've been playing that long, you've applied to specific schools with specific teachers in mind. I don't think anyone that plans on being successful in the field will be able to get much from whatever clown is teaching at the local community college.
Further, teaching can be surprisingly lucrative. Teachers that consistently put out competition winners at the state+ level can charge upwards of 100 dollars an hour. Top tier teachers in the LA area charge 300+. The most expensive I've ever seen was 700 /hr. (This is true for piano, which is my frame of reference. I'm not sure what music teachers in other instruments make.)
Continuing some of the above points, basically every really good pianist in the US comes from one of two "lineages" of pianists. Either they can trace their teachers back to Schnabel, or back to Josef and Rosina Lhevinne. I would be very surprised to hear of any 2nd generation student of Schnabel's or 1st generation student of the Lhevinne's teaching at a community college, much less online. I guess what I'm trying to say is that it's really not possible for the students who would succeed to get the information they need in a cheaper form.
But back to the initial point, I'm not convinced that cutting off entire paths of degrees from receiving support in the form of loans won't represent some sort of massive loss to society. Consider all of the potentially lost art/literature/music? At any rate, I feel like either college should just be subsidized by the state, or let people just be personally responsible for what they choose to study (which is what we already do.) I'm heavily in favor of the former.