The supply and demand angle is only half-right. There's an intent to raise the costs to control the amount of people entering college as wages rise, it's supposed to be a class barrier. Combined with admissions tests (which literally started as "IQ" tests) having the scores to gain funding opportunities for education is a eugenic test. It's class-eugenicist poll-tests and poll-taxes performed nationally.
Also much of these schools are funded directly by land thefts in the US: https://www.hcn.org/issues/52-4/indigenous-affairs-education-land-grab-universities/
The University of Minnesota founders started a war to create the school (and the state): https://www.cam.ac.uk/stories/great-university-land-grab
This was during the US Civil War. The Dakota uprising was punished by Lincoln with the largest mass execution in US history, of 38 Dakotas, down from the original 200 captured for execution.
The endowments many of these schools have are predominantly funded from these land cessions. Washington State University's land cessions of PNW nations funded enough to fill its entire endowment with royalties from logging leases. Texas A&M and Arizona are funded by active subterranean oil drilling rights.
The other reason is because the jobs college degrees provide are getting higher wages and the schools can charge that much and someone will take it, and the banks have the surplus funds from Imperialism and the housing racket.