Compounding the problem is that fact that making more money available for higher education increases effective demand, and thereby drives up costs. The figure below, drawn from data of the National Center for Education Statistics (NCES), shows the average tuition and fees in public and private universities from 1974-75, the year that I graduated, to 2006-2007.
Average Tuition and Fees in Public and Private Universities (in Hundreds of 2007 Dollars), 1974-75 to 2006-2007
On average, it now costs more to attend a public university than it cost to attend a private one back in the mid-seventies. Financial aid and loans, together with the greater demand created by more people going to college, help to push up college costs and the higher college costs, in turn, result in heavier subsidies and bigger loans. Eventually, as Toby suggests, taxpayers will end up paying for much of this.