I have always struggled with how much college should be subsidized. People who go to college almost certainly create positive externalities, and so Pigou would say there should be some subsidy. But people who go to college also earn substantially more over their lifetimes than those who don't. Low income people who pay state sales taxes thus subsidize high income people. Hence the idea that people graduate with debt seems reasonable to me, because the value they get from college far exceeds what they need to invest in college, and it means they are reducing the tax burden of those who don't go to college [I should note that I was among the lucky people whose parents paid for college, so perhaps I am in no position to comment]. On the other hand, if high prices keep 18 year olds from going to college, one of the most important routes to social mobility is blocked.
In any event, a government economist friend of mine has the obvious solution to the problem of the regressive nature of subsidizing college: progressive taxes.