The most-emailed article on the New York Times website right now is about the inexorable growth of college costs over the last couple decades. (It was at college, incidentally, that I learned to use the word "inexorable.") The news peg is a new study that compares increases in higher education costs to increases in family income; the study also makes useful calculations of "net college costs," which factor in financial aid grants.
I could quote the numbers, but you know...it's really expensive. What are we getting for these increased costs? At the high end, which includes my education at Carleton, there are big building projects, substantial investments in technology, lowering the faculty to student ratio, and probably many other things that I'm unaware of. Most of which are very worthwhile. But I would submit that at least a portion of these increasing costs are driven by the competition surrounding U.S. News and World Report-style rankings. Criticizing these rankings is pretty much cliche by now, but I suspect they really do drive a focus in college administrations (mostly unconscious, probably) on the trappings of high quality education as measured by those indexes, as opposed to the intangibles that really make a high quality education. (Plus, if all your peer institutions are charging a lot more, low tuition almost seems to cast doubt on your own school's prestige.)
Another factor: There has been very little downward pressure on college costs. As the article mentions, middle class families generally decide that college is extremely important, and that they will finance it with debt if needed. While I appreciate all those subsidized federal loans, one of their main effects is probably to increase colleges' pricing power. If people didn't have access to all that cheap financing, schools would be under more pressure to keep costs in check because otherwise their students wouldn't be able to pay.
Not that I know what to do about this, since insisting on more efficient spending is easier said than done. I guess the increases in cost wouldn't be much of a problem if admissions were need-blind and institutions met 100% of need with grants. That would take a whole lot of money, but I know I'd give more generously to Carleton if it were toward that explicit goal.