How is someone with only high school as experience expected to assess how well they will be doing in 401 Statistical Mechanics down the road, what job they will have, how difficult it will be to make their student loan payment on top of a carpayment, rent check, groceries, etc.? Up to this point in life most of them have lived at home, had no job, no responsibilities, and are used to having all the important decisions made for them. Their first real life decision shouldn't concern whether to sign up for a hundred thousand dollars in debt. They realize it's a lot of money but it's all part of some nebulous future to which their parents, teachers, and peers assure them a "good college" is the key to success. And their actual responsiblity to pay back the loan is deferred four or five years into that future.
What's missing here is the other party to the risk. If you were to take out a loan to buy a house or start a business, you would have to convince the bank that it was reasonable for you to pay it back. The goverment has removed that risk to the seller of the loan on the theory that now you can take out a cheaper loan, but with the downside that there is no second assessment on whether the loan is a good idea.
But in the grander scheme the bank is mostly just an accessory. They're earning a percentage, it's the colleges who are pocketing the lump sum, and the colleges are also doing so with the entire risk shifted onto the student, despite their continued intimate involvement in whether the student's investment will pay off.
IMHO, the university should be as responsible for the loan as the student. Call it a partnership.