Second, funding has been cut for public universities significantly. A lot of public universities charge tuition that is far more than it was 50-60 years ago. Ironically the expensive private schools are where you want to go for low cost college. They can afford to give full rides to a large portion of their population. Hence the competition.

People have gotten better at playing the game. It's like how chess ELO keeps going up. If you did SAT prep, was a nationally ranked fencer/golfer/tennis player, did volunteer work, founded a tech club and had a 95 average in the 80's, you'd have your pick of colleges. Much in the same way your average GM would kill if they were playing back in the 80's. These days you'd still do okay but you'd be competing against a larger pool of people who also did all of these things.