The problem is that private schools charge tuition of ~40K a year at some places (Harvard is 60K a year), and while they'll often lop off 30K for a poor student via grants and scholarships, that's still $10,000 for tuition alone, not counting any living expenses or books. The brand name of the school better be **** good, and your choice of career better be worth it, to make up for the larger cost of the loans you have to bear.
The problem is that school tuition has gotten ridiculous. And unfortunately, part of that problem is the easy availability of student loans, even for ridiculous amounts. More students need to learn that rule of thumb you pointed out earlier. I think far too many think that the loan amount just doesn't matter, and the schools take advantage of this by spending tons of money on things that don't affect the quality of the education much, but will attract young students, often with little or not money sense, and with what appears to them to be an unlimited credit card in the form of those loans.
I'm not sure what the answer is there, but buyer beware is a good approach. What a lot of people don't realize is that unless you're going to try to get into some top law or business firm (and let's face it, 99.99% of students aren't or wont), where you go to school pretty much matters zero to your future job prospects. The overwhelming majority of employers don't care or even look at where you went to school. They look to see if you have a degree, and whether that degree applies to the job you're applying for. And frankly, they look at other things even more. The degree may get your foot in the door in terms of the application process, but that's about it. Pretty much no one cares what grades you got, or what school you attended.
So even though it seems like free money with those loans, students should go the cheapest route possible. Attend community college and get an associates first. Then transfer to a 4 year university (one local to you preferably). Do some math on the costs. Sometimes it's less expensive to work part time and take an extra year or two getting your degree, but reducing the total amount of your loans. Sometimes, depending on how the school costs are figured, it's less expensive to just take bigger loans and plow through the course load as quickly as possible.
IMO, this is a time in people's lives when they've got a lot of options and a lot of time. Take advantage of that. But don't do so why blowing massive amounts of money on student loans that are going to crush you later. I've known people who took 10 years getting their degree. But they did it by working part time and taking just 2 or 3 classes a semester. When they were done, they had little or no student loans to pay off and frankly, they were more employable when they got that degree than if they'd rolled right through, gotten out by 22-23 years old, and had no clue what to do with the degree they just got.
There's lots of approaches. I just think that kids should not feel so pressured to go 4yr or bust when it comes to education. Take your time. Enjoy yourself. And it's a **** of a lot easier to do that if you *don't* fall into the student loan trap.