I think it's more of a problem that the economy simply doesn't need as many people with college degrees as are produced. Even if companies need to filter candidates for competence, they'd still have to do that, and we'd still be stuck with a glut of people with credentials that will go unused due to over supply. I don't have an answer to that. (except that apart from the massive debt problem, I still think it's a net positive in society to have slightly better educated people even in low-skill jobs.)
As for free college, countries that have it don't just make it free for anyone: there is a significant filtering process that entails tracking students who don't perform academically into paths more suited to specific trades instead of college. If there's a solution to the above problem, it need to include something like that as well.
College degrees generally? Sure, I agree - the market doesn't need a lot of them.
I think there's a lot of market demand for certain capabilities though - specifically capable software developers.
Maybe there's an argument that there's not enough intellectual capacity to meet this demand, but I think it's more an issue of opportunity (Lambda's student success seems to be evidence of this). I guess I'm not convinced there's oversupply generally as much as there is an oversupply of certain non-economically viable majors (because of this incentive problem).
For the free college, even with those restrictions (which are good), I'd argue it doesn't relieve the incentive alignment problem with the colleges themselves (so it harms potential ISA competitors without solving the underlying problem).
As for free college, countries that have it don't just make it free for anyone: there is a significant filtering process that entails tracking students who don't perform academically into paths more suited to specific trades instead of college. If there's a solution to the above problem, it need to include something like that as well.