If making education free was the goal, why not stop messing up with student loans and provident students with scholarships. Every course you flunk or take incomplete, you pay out of your own pocket. Every course you pass you receive a partial (or total) refund based on the final grade. And if you keep your GPA above a threshold, you receive an living allowance about 3x-4x minimum wage (based on the number of credits you take).
This way students would get a free higher education... at least those that make at least some actual studying.