However, university cost inflation is even greater than health care costs. One of the only logical reasons is that as more “free” or “cheap” government money enters the system, the more inflation. Ready availability of student loans has made universities much more insulated from market pressures than “normal” industries.

If you were to eliminate student loans, costs would drop like a rock. You wouldn’t have universities hiring endless Vice Provosts of Some Bullshit Initiative or spending 10s of millions building “Student Life Centers” or luxury-level athletic facilities for sports that aren’t revenue self-sustaining. Universities are like the military — they pay the privates (adjunct professors) almost nothing while spending huge money on things like the Crusader Artilley System (insert random boondoggle university initiative here.)

Considering university tuition at a private university for a single student per year is literally more expensive than the salary of a single low level professor, it’s clear universities are running quite a racket. And we haven’t even touched on the insanity that is textbook pricing.

>Considering university tuition at a private university for a single student per year is literally more expensive than the salary of a single low level professor,

Woah. Maybe a few freshmen should band together and hire some PhDs to assemble a fire-and-forget university. If you can pay for one professor per student, a class of 20 students who want to major in the same thing could easily fund 4-6 classes/year and have a factor of five left over to rent a nice room in the community center. Obviously this isn't about education anymore.

In addition to this very good point, Baumol's cost disease makes education ever more expensive as long as it is a labor intensive practice.