I suppose the Free Market would make sure that their 'customers' had input into how tuition money is spent. After all, if the government isn't involved and you're free (Free Market, remember) to move your student, then the school needs to cater to your expectations or lose tuition money.

Yeah so it turns out that the education consumer doesn't tend to spend the education dollar on quality education. Consider the current mess in privately-paid higher education.

Education is the vegetables on the dinner plate of life. I is a complicated long term investment to make good choices, but those choices have huge externalities. Parents make choices that affect their children (that is an externality) and those children grow up to affect society (another externality)

Don't forget that the for-profit colleges get 99% of their income from government financial aid. They don't have to serve their customers well; they just have to do the minimum amount of work to get the financial aid money.