Lots of rent seeking.
I know a number of people who would have, a priori, been better off just heading straight into the workforce or finding a trade to do. I also know a number of people who got a degree and went into another field, either by choice or by circumstance (eg, not finding a job), and could have ended up the same place without college. I think in either situation, these people may have thought different about their choice to go to school based on the availability (or lack there of) of school loans.