This would save young Americans from going into crippling debt, but it would also make a university degree completely unaffordable for most. However, in the age of the Internet, that doesn’t mean they couldn’t get an education.
Consider the long term impact of this. There are a lot of different ways such a situation could go, for better and for worse.
Those aren’t the only two options. Where I am the government will pay the entirety of your tuition fees for your first attempt at an undergraduate degree, plus one repeat year if needed. No expectation to pay anything back. Additional grants are available for living expenses. Student loans are still available if needed, but not strictly required like they seem to be in the US.