This post and this followup by John Holbo are pretty depressing reads. They did make me think a bit about the cost of college and where it [maybe] comes from.
While I have mostly felt that a sizable portion of the increase in college cost was due to [state] governments cutting or at least not increasing their funding, there is a real cost associated with adding departments/schools/courses and a smaller one with adding and improving other living aspects (the notorious climbing walls).
John is very pessimistic about the possibility that state funding will ever come back. I am not really optimistic on that front, but I am somewhat less pessimistic.
Something that wasn't really mentioned and that I do see happening at small levels now is private sponsorship of university. The current extreme is well represented by Nike's involvement with the University of Oregon, and smaller scale has been happening for quite a while (I'd guess that most people who attended university in the past 20 years found either Coke or Pepsi products in the cafeteria but not both).
I don't really think that that is a particularly good deal either, but as it gets more expensive, it becomes more obvious a route for companies to get good employees. Granted in our depressed economy this incentive is far less since there are more job seekers than positions, but in times of full employment it makes sense for companies to offer to pay for school in exchange for 5 years at a set salary after graduation. More likely, as it is more flexible, would be companies offering to pay student loan payments in addition to stated salaries up to a certain amount per year (or to match payments as with 401k's).
Hell, if I were an employer I would consider buying out the student loan entirely to offer a lower interest rate for repayment (though this could be an issue for employees that leave or are laid off). My guess is that our student loan and tax systems are sufficiently screwed up that a savvy employer could actually profit from this if managed correctly.