The American Association of University Professors has published an interesting graph [pdf]. I would embed it here, but that's not easy with blogger, since it's a pdf. The graph shows the percentage change in the number of employees in higher education institutions, by category of employee, from 75-76 to 2011. The graph is figure 1 in their annual salary report.
To get to the point, it's the administrators. The "Full-time Nonfaculty Professional" category has increased by 369% in the last 35 years. During the same time period, faculty positions have increased a measly 23%. There are now 3.7 times as many administrators bloating the payrolls of our universities as there were 30-some years ago. So that's why college tuition has grown by about 1200% in three decades. We're paying twelve times as much for tuition to finance a bunch of bullshit jobs.
It doesn't have to be like this. As Rebecca Schuman has noted in a slate.com post, there is one (one!) university in the USA that has been hiring more faculty and getting rid of bloated salaries on the administration payroll. That school is Iowa State University. What is their secret? ISU provides an existence proof that sanity can be restored. This one school is increasing faculty, while others are eliminating majors.
How do we fix this problem? I suppose the state legislators could do it. They approve the university budgets, right? The professors could go on strike. Eventually, this bubble will burst. This is some kind of deep irony, or a very cruel joke on college students, who are graduating in droves with debt that will take decades to pay off and lousy job prospects.
The TL;DR on this topic is Thomas Frank's post at salon.com.