It sounds like a good idea, but I don't think college should be free. These institutions are businesses like every where else. The prices are consumer driven and if access to student loans wasn't so easy to begin with, tuition wouldn't be high as it is. Besides, we all know there is no such thing as "free."
There are not enough jobs to accommodate all of these graduates, so what would flooding the market with even more accomplish? A college degree is virtually equivalent to a high school diploma now anyway, so handing them out to everyone will only further devalue what it stands for. Also as others have pointed out, the problem is that since college graduates are in abundance, virtually every job requires that it's applicants have one, even when it's completely unnecessary. You end up spending four years for a degree that in reality you may not have even needed if you could have just found a job that matched your skill set.