Yes a hell of a lot of money flows thru it. I know that system and have kids in it now. There are colleges that accept more or less any warm body, and in such colleges students may keep trying to remediate deficits before ever getting to take a credit class. But it's not their fault that the kids can't do high school level math, reading or writing.
The solution it seems to me is what Trump proposed in the campaign: having student loans partially privately underwritten so that good risks get the loans, bad risks don't. And routing more people to trade school. More useful trade skills, less useless degrees in sociology and grievance studies for kids who can't get a real degree, and less kids who just don't finish anything and give up after spending $$$ and years pretending to be academic material.
But it's probably not time to push that hard yet.