They'd actually have to underwrite on the basis of the value of a degree -- yeah, no one is going to lend money to the same people who wouldn't be able to repay their loans after graduation. That's good!
Then suddenly we have a society that does not appreciate art or dance or whatever other subjects were dropped.
This is the slippery slope - creditors get to decide what others know and learn and pay attention to. Knowledge is no longer widely available - the experts (professors) might still teach at a college, but will be forced to either pivot or leave when the university slashes their programs. They could teach privately or for free, but I am guessing the number of students who they would normally teach drops significantly.
Once there are too few people in the arts, demand will incentivize more people to get into that field.
Moreover, don't we currently have a problem where we don't have enough students going into STEM?
If this is the goal, then the far simpler solution is for the government to explicitly budget a set number of grants for the most promising students in those fields to study specific subjects that supposedly have social value but low economic returns.
It certainly doesn't make sense to subsidize loans for hundreds of marginal students to study "business administration" or "hospitality" at a tier four regional college to get one brilliant dance major at Carnegie Mellon.
Far more efficient for the government to say "we have 800 fully funded dance scholarships, 4000 art history scholarships, 2000 classics scholarships, etc. We're going to assign these scholarships to the most promising graduating high school students in these fields. And the scholarships will only be paid for top-tier universities that have demonstrated consistent excellence in these areas."
That would by far subsidize a much higher level of cultural discourse at a tiny fraction of the cost of the current student loan system.
The assumption that you need a college degree in art to appreciate art is kinda ... out there.
It's no change. That was already the premise of underwriting non-dischargeable loans.
> Then suddenly we have a society that does not appreciate art or dance or whatever other subjects were dropped.
Again, no change. If they were valued enough to support an expensive college degree, career prospects would be less dim.
Isn't that the case already? Aren't most university students looking to increase their career prospects? Wasn't that the whole point of telling generations of kids to go to college, so that they'll get better jobs?