Unusually, I don't think "all economics" is the right take. The political aspect of this seems to be significant. Education isn't being seen as a neutral path for people who are bettering themselves, these poll figures suggest it is a politically active institution.

The increase in price probably comes from a combination of demand for college education and some monopolistic competition in the accredited university market, where government regulation suppresses the supply of accredited universities. I think we're seeing some change with the latter supply (e.g. community college, online degrees, etc) but demand for a U.S. college degree still stands strong on the global market from international students. It would be nice to get data on yearly university applications and do an empirical analysis on supply and demand.

> The increase in price probably comes from a combination of demand for college education and some monopolistic competition in the accredited university market

I think you're missing a big factor, rising admin spend [1].

[1] https://www.usnews.com/education/articles/one-culprit-in-ris...

I'm not so sure it's a cycle. Ultimately, employers' requiring a college degree for more and more jobs is what drives the increasing demand, and the increasing demand results in increasing prices. And employers require a college degree because they need some kind of coarse selection screen, and don't seem to have any other way to distinguish capable applicants from incapable ones.

should increasing demand increase prices?

It is all of the following factors: restricted supply, price indifferent consumers, free credit, on-academic competition between colleges, high regulation, and administrative bloat.

If you set these factors aside, there is no reason people couldn't get a legitimate bachelors for a few thousand dollars a year.

you could literally run an engineering program using class recordings from MIT and Stanford out of a community center like AA meetings.