This happens in practically every University to some degree, even state ones. I've sat in on a few administrative financial meetings and briefings at a rather large University in the NW.
They were discussing financing, in my opinion, ridiculous campus expansions with frivolous, overpriced amenities, by issuing municipal bonds. Bonds which they weren't even sure they had the capacity to repay. A lot of the liquidity they expected to be available to service these bonds at the time of maturity were based on some pretty ridiculously optimistic growth projections in the student body AND increased tuition.
That's right folks, the entire financial tenability of all the Universities are predicated on a constant and continuing increase in tuition, in addition to very optimistic projections in growing student attendance.
This is the classic setup for a MASSIVE, systemic, generational bubble. Tuition is already squeezing tons of prospective students into ridiculous amounts of debt. That debt is already at $1,200,000,000,000 in the U.S. That's $1.2 trillion. College graduates are entering an already strained and labor-saturated job market. So what are they doing? Getting any job six-months post graduation, even if it's minimum wage, because those loan repayments are starting roll in.
But wait... $9.25/hr can't pay off my $43,000 dollar loan when I also have to pay for rent, food, and insurance. I guess I'll just not repay those loans. Who needs good credit anyways?
So now we have the start of a systemic, generational default on a MASSIVE debt bubble. When students stop paying their loans back, banks/the government will stop lending out student loans. That means that the Universities will have to either drastically cut back on tuition, or cut back on spending. So obviously they cut back on spending, and cut tuition as much as they can. But WAIT! They have all those municipal bonds that they issued 8-10 years ago that are entering maturity soon. But they have no money!
Now we have Universities defaulting on their bonds, which will require either a government bailout, or they simply go under.
And now we have tons of graduates with degrees from Universities that are no longer in existence or accredited. Are their degrees worthless? Who knows.
Tl;Dr -- The financial system of higher education is a disaster. This is a systemic problem, and the bubble is going to blow sometime soon. It's untenable. And if you think the subprime crisis of 2008 caused a squeeze on millennials, just wait for this one. It's going to be bad.