I have actually spent a fair bit of time talking about the degreed vs non-degreed employee with people I respect. We all have observed the same thing. A degree is no guarantee of competence. However, the lack of a degree can allow competence in a very narrow area, but once the questions become larger, the non-degreed generally fail.
This is not discrimination. It is a simple reality observed by many professionals in business over decades.
The question of the income barrier to higher education is valid. Something must change drastically to fix that. It's worth noting that one of the things that must change is the attitudes of those attending. Many of the costs universities are incurring have nothing to do with the actual education of students. Sports programs and lavish facilities are the focal points rather than a quality education. It's time to cut all the fluff and focus on the academics.
My remarks may sound resentful, but they were in fact a lamentation about the talent that large companies miss. I personally have advanced degrees from well regarded universities, and am quite satisfied with the professional opportunities and remuneration I have received. You will find my comments in this thread and others advocating as much learning as possible.
But I noticed that much of the best talent I worked with could not make it through the front door based on current HR requirements. They didn't have a degree, or they didn't have a degree from one of the "right" universities, or they didn't have a top GPA. What they did have was a keen intelligence, an ability to learn deeply and rapidly, and deep focus on meaningful problems. These attributes can be useful in a university setting, but do not assure success in that environment. Boredom with the pace of structured learning, disinterest in artificial problems and simple geographic or financial barriers preventing attendance of the "best" schools can all lead an outstanding person to have an unimpressive resume.
The HR gates "may" provide a higher average result, but it frequently weeds out the outstanding performers. And as you say it does not guarantee a good result. The HR gates are an established and documented "best" process. The problem with "best" processes is that if everyone follows them, then everyone comes in first. Clearly there is a logical flaw here. In actuality, "best" processes are suited to preventing below average results. Achieving superior results in hiring, as in virtually every other human endeavor, requires hard work and intense thought. Some of that thought should sort those who are deep, but narrow from the non-degreed folk who are deep and broad, and achieved their knowledge through unstructured means.
As a corollary to this general problem, the engineer whose knowledge goes no further than what he had upon receipt of his degree may be a valuable employee, but he is very unlikely to be one of the top talents that are so desirable.