Measurements could be organic and self adjusting. In other words schools are required to accurately assess the average earnings, including nonearners, of each and every degree. Degrees above some rate, adjusted for location, qualify for funding - others do not. It could be on a scale rather than binary. Too many health care workers, funding for more pursuing it is completely organically reduced.
Another cool feature is that this further aligns the motivation of schools (who greatly benefit from 'reckless lending') and students. Reckless lending is only possible when the degrees being pursued are provably valuable.
There still has to be a lag. When investment is a reaction to growth, and growth is a reaction to investment, you've got practically the perfect recipe for cyclic behavior.
Also, you can't just switch on college majors by switching on funding. The pipeline for some fields is years, for instance arguably for math intensive fields, or some performing arts such as playing the bassoon.
Here are the majors you can study. I hope you got interested in math 10 years ago, or learned to play the bassoon.
Another cool feature is that this further aligns the motivation of schools (who greatly benefit from 'reckless lending') and students. Reckless lending is only possible when the degrees being pursued are provably valuable.