(Preemptive Edit: I know they have free college in some European countries, but maybe they have the same problem.)
After a while we said "no, everybody should go to high school and learn civics and math even though they aren't necessary for most specific jobs". Before that, we had the poor starting manual labor or apprenticeships at 12, never learning anything beyond their specific skill, while actually becoming educated and a citizen was reserved only for the rich. We decided to make our workforce and citizenry more thoughtful and educated and improved society as a whole significantly.
It's time to do it again. Our world is much more complicated now, human knowledge has expanded vastly. College education is now the baseline for 'educated person' and that's okay. It's great, even. Thanks to free high school the poor can study math and history. If there were free college, the poor could study economics and philosophy and computer science too.
How many talented people do we lose by shunting the poor (who are, in capitalism, always the vast majority of the population) into non-education job training when they are young because they can't afford to learn about the world?
While the lack of student debt from studying so much sounds all nice, the reality is you get a bunch of 26-28 year olds graduating with Master's degrees and ZERO working experience, bar some internships which may or may not be useful.
There are two sub-problems here: "Free" education (not actually free when you see how much taxes are) allows Europeans to take their sweet time in graduating, so it's common for people to be done with their Bachelor's at 24 or 25, while their American counterparts graduate at 22/23 because of the (financial) pressure to finish on time. A combination of high taxes, encouragement from peers/uni to "study abroad" instead of work and from companies to keep their student status to stay interns, means there's also not much motivation to transition to full-time work.
Make no mistake about education quality here, it's not better than America, in fact it might be worse. The population here complains a lot on their local education quality (though you'll rarely ever hear it on the Internet - see last paragraph on why). A lot of memorization from books for things you'll rarely, if ever, use after graduating, lots of partying and bumming around. "Study abroad semester" is nothing more than a proxy term for "4 month vacation for sex, drinking, parties and roadtrips while the taxpayer takes care of the host country's evil out-of-state tuition (usually US, Canada or Australia)" - see for yourself with those "Erasmus" (exchange) students from Europe doing their exchange program in America.
There's a misconception commonly spread in Germany that staying as a student to work means you pay less taxes - kinda true, but technically it's because you get paid so little, you stay in the non-taxable <9000 EUR/year bracket - so you have people postponing graduation or enrolling in a new university without taking any courses after graduating to keep their student status.
Student/internship wage exploitation is turning into an epidemic because of the large student population that remain students for such a long time paired with legal loopholes that allow many companies to get away with hiring a bunch of cheap students instead of one full-time employee.
I've been living in Europe for a few years and they are not immune to the problems that Americans complain about. They do a good job complaining about America on the Internet while downplaying their own problems and spreading positive vibes (cough propaganda cough) on how Europe is superior/more human/ethical than America though.
Human beings are not studying machines.
Fail a course, and the response is not "re-booting, preparing trial N+1", the response is usually discouragement.
With free courses, good material, always on, and self selected motivated students - MOOCs were supposed to change the way we studied.
They had % completion rates in the single digits.
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In every education system, there will be an issue.
The american system did very well - as long as there were jobs for high school students.
The fact is that most people are not cut out for college.
AS your (or any) society, starts forcing more and more people into higher education, because it becomes an unoffical pre-req for employment, you end up with many third order problems.
Firstly - testing.
In a class of 5 students, a teacher can test a students knowledge with detail.
With a class of 50 students, a teacher who has to grade submissions cannot afford the time to grade all of them.
This results in a drive for uniformity of answers - the removal of subjective answers from students, in favor of multiple choice.
The other way to enforce uniformity is to have a set of acceptable answers, so any deviation from it can just be identified and removed.
Since more students are now entering higher ed because its a pre-req for a job, they don't care about the subject. They care about the cert.
That means they will cheat, or memmorize the answers, and get on their merry way. Not everyone understand the humor in chemicals, or math. Nor do they care.
This is a process - and once started it grates at the old education system, till all of its higher purpose is eroded, and it streamlines itself to become a certification system. Buy your degree, or memmorize your way to do it.
This brings us to the next problem - not enough work even for degree holders.
The creation of more degree holders doesn't resolve the inherent jobs problem.
It just creates more supply, which drives certificate inflation, and wage stagnation.
Higher degrees are meant to indicate a level of mastery and capability on a topic. After a few cycles of degradataion, it just means that the end product is someone with the capability of passing an exam. Not necessarily that they can create new and novel works in their field.
And all the while, life goes on. These students are usually young human beings, who have varying levels of motivation, maturity and experience - they will go on holidays, take breaks, fail, succeed gloriously, do stupid things and so on.
TLDR: What you have described are epi-phenomena. The issue is jobs. The input cost of production from blue collar labor has been going down over years.
Unless there is meaningful work, for people who were never meant to be ... data scientists, or comp sci engineers - you will always have a problem.
The fix for this can be realized with a tax that funds education; if you need someone with a bachelors, you pay X as a tax. If you need someone with a masters, you pay 2X. A PhD? 4X. If the position doesn't require a degree and you train them, you pay no tax (ie journeyman or apprenticeship).
The problem is the proliferation of degrees, and thinking that hasn't caught up with the new reality (e.g. "getting a degree is good" -> "getting the RIGHT degree is good").
Not sure it gets better in a global world, where the vast majority of high IQ people live outside the west, and intelligent jobs not based on local legislation (like lawyers) can move easily internationally.
