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<p>If the government increases in dollars spent to higher education funding were only in grants, I would agree with you. However, the vast majority of funding is in subsidy payments (interest while the student is in school) to lenders who lend out 15 times (assuming about 7% rate) that amount of the subsidy to the students receiving the loan. For example, $1billion in subsidies to college lenders (payments on interest while in school) supports $15billion in loans instead of $1billion in grants.</p>
<p>It is the investor money that is being drawn into the student loan industry by the government subsidy that is pumping up the revenues for the colleges.</p>