The reason I characterize it this way is college tuition has skyrocketed. The same thing happens in private schools—wealthy grandparents are common enough that children without wealthy grandparents are much less likely to be able to go to private school.
But it's just how prices work. If you're selling widgets for $5 each, and a new batch of customers come along who are willing to pay $10 for a widget, guess what your per-widget price is now. If you can't sell them all for $10, you might put the rest on sale for $5, but only after you've served all the $10 customers.
The universities are still taking some domestic and/or scholarship students too, but they're naturally giving preference to the full-paying ones.
Could there be other factors driving up tuition? Maybe, but student loans have been around for a long time, and I don't know that they've gotten a lot easier to get. Maybe the recent talk about student loan forgiveness has made some people more casual about taking on debt, assuming it will be forgiven, but that's questionable. The growth in international student enrollment is the one big obvious change.
If you look at the data here [1] you can see there is a wide range of tuition costs for the top 100 universities in the USA, going as low as 6000 usd with the average in-state cost at 17,000 usd.
The most prestigious ones are more expensive. Why is that? A very significant part is the network effect people are buying, they are hoping to either get to know well off or connected colleagues, finish a thesis under a prestigious professor or just simply to have a degree from the fancy university. This is all in an attempt to get ahead. This effect is there regardless of any international students.
[1]: https://www.collegetuitioncompare.com/best-schools/us-top-10...
Adding capacity isn't cheap. That gets passed on to the "customers". Which also raises the price for Americans.
>The money that comes in from foreign students can pay for additional capacity.
No, the cost gets spread out among all the customers. There are no mechanisms where discriminatory pricing kicks in, and only the foreign students pay for the additional capacity.
There is exactly such a mechanism. The foreign students pay more!
I don't have the exact figures to crunch the numbers (and I doubt you do either), but it's pretty implausible to suggest that foreign students are somehow a loss maker for US universities. If foreign students were a net loss, then universities wouldn’t be so keen to admit them. And if they're profitable then they pay for their seats.
The US university system is an incredible national asset. There are incalculable benefits to having the world's best universities attracting the best students from all over the world. That some Americans have managed to convince themselves that this is a bad thing is enough to turn my brain inside out.
Uh, state universities often have a mechanism for that, its called “out of state tuition”.