The startling level of price increases in higher education is due primarily to a change in business models that started, fortunately, after I left school. It consists of the following: schools treat their students as consumers and build resort-level amenities; affluent parents–frequently foreigners–consequently agree to pay exorbitant prices for the experience; and the additional funds from the higher tuition are recycled to increase aid for the less affluent. Does it work?
There are two problems with the model as of today. First, the prevailing public narrative includes the price increases, but not the added financial aid for the less affluent. That has to change. Second, the model probably works for elite schools because the sky-high tuition reflects the improved economic prospects for their students, but not for schools designed to train Americans of average ability for run-of-the-mill jobs. In that case, the higher tuition does not make economic sense for either the service provider or the consumer.
The bottom line here is that state schools should avoid using the model. That is primarily the responsibility of both blue and red state governments.