> Supply and demand isn’t related to “cost”

Demand isn't related to cost, but supply certainly is. Lower costs mean greater quantity supplied at any price level.

“The portion of the marginal cost curve above its intersection with the average variable cost curve is the supply curve for a firm operating in a perfectly competitive market (the portion of the MC curve below its intersection with the AVC curve is not part of the supply curve because a firm would not operate at a price below the shutdown point).”

https://en.m.wikipedia.org/wiki/Marginal_cost#Perfectly_comp...

Only in a perfectly competitive market, which, as you'll note, is the problem here - there's too much distortion around student fees (demand) to truly call the college market perfectly competitive.