The official college listing is somewhat inflated because the number doesn't take into account the fact that a majority of the students don't actually pay that much for a year's tuition. According to an Associated Press report on MSNBC.com, even at Harvard, less than half of the school's students pay the full, listed amount.
In an article for Consumer Affairs, Mark Huffman lays out the argument made by Ronald Ehrenberg, professor of economics at Cornell University. In order to provide the best education and attract the best students, a college must spend the money necessary to get great professors on staff and give them the facilities they need to teach.
Tuition costs at public universities are subsidized somewhat by state governments; that's part of why tuition costs at private schools are much higher. In recent years, unfortunately, many states have had to reduce the amount of money they allocated to higher education. In New York, according to a Jan. 15, 2009, article in the Long Island Exchange, state funding to SUNY schools had fallen "by 5 percent per student since the early 1990s." Students (and their parents) must then take up the slack.
In order for a college to function well, there must be an administration keeping everything running. These professionals have great resumes, and they expect great paychecks. Further, you have to pay hard-working staff to run offices and maintain the school buildings. U.S. News and World Report points out that these costs rose 13 percent between the years of 1995 and 2006.
One way that schools, particularly private universities, help students pay for tuition is by providing grants paid for with funds from an endowment. An endowment is a large amount of money donated by alumni and other people who love the school. The school invests this money in stocks, bonds and other ways. Unfortunately, when the economy suffers, a school's endowment often does the same, resulting in less grant money and higher real tuition costs for students.