You are absolutely right. If the government has to be in the student loan business at all, it should at least limit its loans to those students who will most likely be willing and able to pay the loan back. It does neither the student nor the taxpayers any good to lend a student $100K+ to get a graduate degree in oppression studies, dead languages, or some other impractical field. All it does is leave the government with a bad loan and the student with a lifetime of debt that they will never be able to pay off.
Well, the government sets student loan limits arbitrarily, so a student majoring in ethnic studies, gender studies, etc. (who are useless in the real world) will receive the same loan limits and rates as a student majoring in engineering or nursing (who will earn more money). Take a guess as to which group is more likely to pay the amounts back plus interest without significant difficulty.
That's not to say that programs like the foreign languages, history, archaeology, anthropology, etc. are not useful but that there are way too many folks in this field of study.