I've posted a fair bit here about RU's fiscal crunch, but that's only part of the equation (with causes, until recently, largely localized to New Jersey) as to why tuition costs keep rising above the rate of inflation across the country.
What's going on (and is nicely explained by the Chronicle of Higher Ed) closely mirrors the seedier aspects of college football in way that doesn't make university administrators nearly as uncomfortable as it should. In short, the actors at the top of the food chain with huge endowments, put their dollars to work with massive construction campaigns, and hiring binges targetting at luring in top faculty talent. Buttressed, of course, with larger, higher stakes, and increasingly frequent fundraising.
This, along with an increase in merit aid, is aimed at further improving a school's prestige, which should in theory have cumulative effects. This cycle forces the next several tiers of schools to respond in kind, even if they don't necessarily have the same level of resources. The net result of the arms race eventually trickles down to the majority of students and their parents caught between superachievers and those requiring need aid. It's everyone in the middle that ends up having to foot the bill, in the sense that they have to spend larger proportions of their income than families at the top or bottom of the income brackets. (As an aside, financial aid is taking a major hit now, and looking for a scapegoat, the spotlight has in turn shifted to merit aid.)
The key question always was: where was the breaking point? With a deep recession, we may have our answer. If families look at education as an investment in the future, it's harder to justify taking on loads of debt. This means that New Jersey, and other local schools will benefit from more quality in-state students choosing to stay home over the lure of going out of state and/or to private schools, but that will be similarly counterbalanced by bringing in less out of state students willing to pay a higher tuition rate.
The Chronicle wonders whether, with the baby boom coming to a halt, and the era of easy credit over, higher education may be teeming towards its own bubble bursting. Is higher ed going to follow mass media down its path of destruction? Certainly, endowments are way down across the country with markets tanking, and many of these institutions are overburdened with debt. Non-discretionary costs for utilities, insurance, and pensions are continually rising. It's not a sunny topic to think about, but I think this topic is useful to illustrate the point that the challenges of college athletics can't be easily divorced from the issues facing the larger university communities. In fact, athletics, and college football (albeit compressed and accelerated) in particular serve as an leading indicator; a way to glance into the future and spot the emerging trends that will soon befall and swallow up everything in its path. Exceptions to this trend are, sadly, unlikely to become the rule.