Your last paragraph describes the Australian university system. Government foots the bill to invest in your education, you pay it back gradually (and not until you're earning enough for it not to hurt).
The problem in the US system is the government feels everyone has a "right" to an education, so it will underwrite an unlimited amount of loans regardless of what you do with them.
That pumps the system so full of cash no one is quite sure what to do. They just keep raising prices and people keep coming, because what are you going to do, not go to college? Even after funding slows, the prices are still sky high, and people keep paying.
Thus ITT Tech.
and a nation paying highly unreasonable and ballooning sums of money so that a functional literate adult can obtain an education that rarely leads to 10x better outcomes
You can pay for private K-12, or "pay up" and move to a more expensive school district (read: taxes) which would theoretically give you a better education.
School districts have problems with people claiming grandparent's home addresses to attend a better school, and it happens across the country.
[0] http://www.moneysavingexpert.com/students/student-finance-ca...
I've always quite liked that my student loan repayment is tied to my salary as it's one less bill to worry about if/when things go badly. It means that when we were getting our business off the ground and didn't take salary out, I at least didn't have to worry about the student loan.
Don't get me wrong, I'm looking forward to the day I'm not having to pay it but at the same time, I think the changes in university fees would be better received if they simply called it a graduate tax that expires after 20 years.