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).

Agreed. Higher education mostly became a pretext to justify why certain people were entitled to receive higher salaries in exchange for lower experience and lower quality output.

It's likely also partly why the west moved away from contract-based knowledge work and towards full-time work... It decouples the product of one's labor from its costs (salary) and it makes managers' lives easier as it gives them much more flexibility and less pressure with regard to how they measure and rank employee productivity. If costs were proportional to output, managers would pay a lot more attention to efficiency as their paychecks would depend on that efficiency.

Instead, managers' paychecks and career prospects are mostly based on political nonsense like how many people are working under them; literally creating an incentive for inefficiency.