Improve the quality of average public high schools so that a high school diploma is a guarantee of basic literacy, science knowledge, basic schools, etc.
College degrees only work as a selection tool for employers since not everyone has one. High school degrees are currently nearly worthless as such a tool since nearly everyone (the current high school graduate rate in the US is about 83%) has one. You still need to get one, of course, since if you don’t have one, people will assume you dropped out either because you got addicted to drugs, or because you’re well below average in intelligence and/or conscientiousness.
College degrees are eventually going to suffer the same fate as the high school diploma due to all the pressure on people to go to college. And eventually, there will be political pressure in the US to make the government pay for universal college the same way it pays for K-12 education. Eventually, we’ll be encouraging extremely marginal students to spend eight years getting a bachelor’s degree and however long it takes such a student to get a master’s degree, and Social Security will collapse since no one will actually be working.
College degrees are not merely used as a selection tool for higher skilled jobs. In many instances they are used as a basic competency filter for literacy, ability to work in an office environment, etc. Indeed, many jobs merely require "some college" as a credential, not even a degree. That alone is enough of a filter. This means that jobs that require skills that any high school graduate should have are today out of reach for those people because they've been given a sub-standard education with a degraded market value. Which means that in order to be in any way competitive in the job market, even to get an entry level office job, often requires expending additional time and money, saddling oneself with college loan debt, and so forth. Today entering the job market from the bottom is a lot more difficult and more costly than it used to be, with significant deleterious effects on career/wealth advancement through life.
I think you’re assuming that there’s some minimum bar for “literacy, ability to work in an office environment, etc.” and that everyone above that bar is of fairly equal value to employers. I think you’re also assuming that nearly everyone can be brought up to this bar (note: if employers believed this, they could hire people without college degrees for cheap and train them on the job). As soon as you look at these traits as existing on a non-binary spectrum though, and employers wanting to hire people at an appropriate place along the spectrum (the most desirable workers obviously being more expensive to hire), I think it becomes obvious that any sort of filter that lets through everyone or nearly everyone is not going to end up being very valuable.
Politically impossible. Any plausible alternative has to pay a weirdness tax too because if you’re smart enough to go to college, why wouldn’t you? That makes high school irrelevant. And the UC system, among others, is working on making just having a Bachelor’s a poorer signal of literacy and numeracy.
