Has the decline of knowledge work begun?

Bachelor Degrees need a complete rethink, it was basically modified finishing school for rich capital owners, needing to make their children of proper class before they could take over their businesses.

It then became a vocational degree for the working class, despite being completely detached from useful skills for a wide swathes of degrees. The only value is that you could talk the talk and become a member of the professional managerial class if you impressed the right hiring committee/individual.

In spite of this, we decided the working class should take out crippling loans to pay for this degree, and be in debt for the rest of their working life.

It's not sustainable, and just forgiving the debt only will make it all more expensive and less aligned with actual results we desire (useful workers).

The liberal arts model was intended for the elites, and the idea of education as means of producing useful workers is straight from a totalitarian planned economy. But there is also the Humboldtian model of higher education, which focuses on educating informed citizens who are free to make their own choices. Learning vocational skills is easy enough if you have good education, and it's also necessary to be able to do that outside school, as careers rarely last a lifetime.

American higher education is expensive, because you chose to defund public universities. And because you have an unhealthy obsession with rankings and top universities. Those are the things you need to change more than education itself.