Mike talked about how Repubs and Dems want the same basic things but disagree about (a) how to get there, and (b) the role of government. I'm guessing you and I are on different sides of (b).
* http://www.chicagonow.com/chicagos-real-law-blog/2012/02/do-...
* http://www.halfsigma.com/2006/12/why_employers_d.html
(just a few links from a Google search for "employers can't test IQ")
It's deemed socially acceptable to use college degrees as a proxy for "smart enough for the job" or even "smart enough to be trained for the job."
Alternatively, because primary education is so bad in the US (grades 1 through 12---roughly ages 5 to 18 for those outside the US) that a bachelors degree today is the equivalent of a high school diploma from the 1950s/1960s.
The result is that demand for college decreases, therefore the price will decrease through the properties of supply and demand, which leaves an education that returns to being affordable for those who actually care about an education.
You are right that businesses will have to find a new filtering mechanism, but it can be one that doesn't come at the cost of making education unobtainable to those who want an education.
This is a second order effect which I am not so sure which actually happen reality. I posit that it is also likely that people move the requirements to an internal portal, everyone gets wind of such a thing, mainly when HR reps start writing that "breakthrough book" about secrets of getting your first job and everyone still keeps going to college.