The real problem is indeed related to the market price of higher education, but it's not just that universities are steadily making up for distortions caused by federal aid. The fact is that we've never been in a situation where universities were charging a market price in the first place. After all, if the lifetime wage premium for a college grad is a million dollars over 40 years, then how much is four years of college worth today? Answer: about $300,000 or so. That's $75,000 per year.

Earlier thoughts here.