A couple of problems...
As older GA airplanes wear out, equivalent replacement airplanes are horribly expensive...
An older 172 can be had for $30K...but a new 172 is about $250K.
I assume some of that cost is related to new glass avionics, but my understanding is that a very large part of it is liability reserve...ie a large chunk of money ($100k?) set aside to pay for the inevitable lawsuits.
LSA's should help a little, but even a cheap LSA is pushing $100K, and they are really inadequate for upper-middle class types who are interested in the utility of general aviation (family/personal/business trips). Two seats VFR is really limiting.
As far as loans...lenders have finally wised up and realized it is neither a good risk nor ethical to loan someone $100K to get a $20K job with horrible job security. Kind of like those "liar loans" they were giving to home buyers a couple years ago before the wheels came off the financial bus...
I have no problem with eliminating the flight school loans. Anyone who REALLY wants to fly will have to work for it, and consequently will have a higher opinion of their own professional value. That combined with fewer players should drive up entry-level aviation wages and remove some of the incentive to whipsaw older pilot groups against younger ones.