There&#x27;s several overlapping causes.<p>1. Services in general don&#x27;t benefit from productivity improvements like goods do. As productivity goes up, services tend to get more expensive in terms of physical goods. Education is a service (as is health care, which is also out-pacing inflation).<p>2. Saving is extraordinarily difficult on a national and generational scale. Outside of saving easy-to-extract natural resources (oil) for later, basically the only other option is to make the next generation promise to make things later. This is why the lending standards are like they are for student and home loans - the economic pressures of retirement planning demand it.<p>3. Education is a positional good - you only need a degree for entry level jobs because you&#x27;re competing against degree holders. Since we&#x27;re getting better at providing absolute goods for our society, more resources are getting freed up to chase positional goods.<p>4. A good chunk of the price increases are getting made up with corresponding scholarships and need-based awards. Universities are less trying to gouge all their students, and more realizing that they can pull much more money from higher-income students. This is especially true for Ivy League and other prestigious schools.