I started typing a response to Remigius's comment, and then realized it would be better just to compose a new post.
It's a valid point, certainly, that there would be some benefits to society if the government were to spend more money on subsidizing higher education. There would be some drawbacks, also. And I can't say exactly what the relative merits would be of keeping things as they are versus increasing government spending on education--these things are usually rather complicated.
But what I'm really trying to get at, what really bothers me is the idea that somehow people "deserve" a college education merely by virtue of being alive. Perhaps we could build a better society by giving people more things they haven't earned or done anything to deserve (like free healthcare and even more free education than is already available), but if we do, it ought to be considered a privilege, not an entitlement. A person who is enabled by tax-payer dollars to get a college degree should have an even greater sense of gratitude and indebtedness to society and the government than I have toward my loan companies.
It's interesting, though, how human psychology works. In addition to taking out loans, I received some grants and scholarships during my academic career. I was grateful for these when they were awarded, but I promptly forgot about them--even the ones for which I had to write thank-you letters. Having no head for figures, I don't even remember how much of the cost of my education they covered. I really have very little idea of the value of the free gifts I received to help pay for my degrees.
I do, however, have a profound sense of the value of the loans I took out. I have some idea of how long it's going to take me to pay them off (a very long time), which indicates to me just how lucky I was to be able to take out these loans, and also indicates to me the monetary value of my formal education.
Logically, I ought to be more grateful to the entities that gave me free money, than to those that only lent me money. But the opposite is true, because I have very little sense of the value of the free money, whereas I know very well the value of the money that I am responsible for paying back.
So, anyway ... it's a nice idea for everyone to be able to go to college for free, or for there to be more government grants available to fund people's education. But it's also a nice idea for everyone to know the actual value of the privileges they enjoy, and it seems to me that having to work for those privileges creates just such an awareness--whereas giving them away for free tends to detract from it.