First, the German economy is dependent on a skilled labor force. As a result, Germany subsidizes tertiary education across the board, not just college. That's not only to keep college accessible for the poor, but to encourage young people to get a solid, credentialed education.
Second, the usual expectation in Germany is that you'll finish university with a graduate degree. In fact, until recently (per the Bologna Process) there weren't even undergraduate degrees in Germany (as they provided less depth than a graduate degree and less practical experience compared to vocational training). The industry is generally interested in an MS over a BS, and having to pay for your tuition may force students to take a break after their Bachelor's degree to earn some money.
Third, there's the German attitude towards personal debt and loans (which is that they don't particularly like either). I think the German banking system isn't really set up do handle big personal loans outside of mortgages and car loans.