At least in the state I went to public university at, its not so much that per-student expenses went up (though they did to some degree), its that the State started funding a far lower percentage of costs, leaving the student (and the student's ability to take loans) to pay for a larger share.
Yes, in the past few decdes there is much less of a sense that having an educated population is a common good, and much more of a sense that it is an individual investment.
In the US, 4-year private (non-profit) college tuition averages somewhere around $60K/year, while 4-year public (in-state) college tuition is closer to $20K. Out of state tuition is much higher, and state schools make a "profit" on out of state student ($50K tuition). But they are still competitive because similar private colleges cost even more.