In regards to your first point, most US students when they go to college don't have the life experience to know which degrees will give them meaningful employment. A kid who was passionate about reading and was encouraged by their teachers and parents to follow their passions would, unsurprisingly, be likely to pursue a degree in English literature. After they've graduated the real world hits them like a sack of bricks and they can't find a way to earn a living.

At this point they've lost those 4 years of their life, end up with unreliable sources income (gig economy, part time work, borrow from family, etc), they're bogged down with crippling debt, and the world tells them it's their own fault. They even feel deep down that it is their fault, but now they're resentful and bitter because they're suffering despite that they had been working hard just doing what they were told to do all along.

With this proposed kind of loan forgiveness, the years are still lost to them but at least they're not crippled with debt as they try to get out of the hole they've found themselves in.

I also think a system like this incentivizes universities to help students make money and be productive after college. Under the current system, schools will shake down anybody for what money they can get. If tuition is based on future earnings, the university is going to try to get the student to make as much money as they possibly can.

In fact, this system would likely swing the pendulum so far the other direction that it might kill colleges of art and literature because they would suddenly be deemed unprofitable to the university.