To further expand on a point I made here, a lot of people are under the impression that huge tuition increases at America’s public universities simply reflect the price that has to be paid for state government disinvestment. But while it’s true that state governments have slashed their support for public universities, tuitions have gone up by even more than is needed to plug the gap. Above from the Delta Cost Project (PDF) is inflation-adjusted spending per full-time equivalent student.
Pay particular attention to the public research universities—the sort of selective, high-profile flagship institutions that dominate media coverage. You might think that in response to reduced state support these institutions would respond with a mix of spending restraint and tuition increases. Instead, they’ve hiked spending quite a bit and engaged in huge tuition hikes. Whether you favor more public support for colleges or less, that’s a perverse form of behavior if you care about student debt levels.