I think this says more about grad school than it does the costs of undergraduate education. You just have to look at the competition for tenure track faculty positions to see that there are plenty of people qualified for the positions who want them today. As far as I know there is no drought of applicants for prestigious grad school programs either.

There are a surplus of students trying to become college professors. We would still have a surplus even if we cut off half of them at early stages of the pipeline.

And we have too many people going to college anyway. Many of them would be happier and better off in the long run if they attended trade school or joined an apprentice program or enlisted in the military. College is an excellent choice for some people, but it shouldn't be the default option.