American universities - where does all the money go?
The answer is completely different at different types of schools. At state schools in California, the increases in tuition have gone to offset decreases in state funding. At some private schools with big endowments, e.g., Princeton, it's simply not true that tuition has gone up dramatically. (Princeton is now about the same price as Berkeley for a kid from an affluent family.) At other private schools, the increased tuition may be paying for amenities like rock-climbing walls, or it may simply have increased because parents perceive high tuition as a sign of status and quality.