It was a simple case of supply and demand; the availability of government loans increased the demand for higher education as fewer Americans had to make a choice between going to work right after high school or getting a college degree. The schools knew this was a viable business plan based on the huge expansion they'd experienced after World War II when millions of returning soldiers poured into colleges on the G.I. Bill. So the schools raised tuition accordingly.
The tuition gorge fest has continued unabated since then, as the government student-loan programs were made available to every matriculating student. And even though the government is only backstopping loans since 2010, tuition is rising at the same old healthy pace.
Many argue that all of these costs are still worth it. They point to a new study out this week that shows that people who don't get at least a college degree miss out on an average $800,000 in earnings over their lifetimes. And that argument has been a good one for a long time.
Read MoreSkip college, forfeit $800,000: Fed study
But the argument is getting weaker as we see the way student-loan debt is starting to dent the economy and change our entire culture. Several experts believe the crucial first-time-homebuyer market is suffering mightily because so many 20 and 30-somethings are too straddled with student-loan debt. And a recent report by the Brookings Institution citing an all-time low in American entrepreneurship also suggests that young people who could be starting companies are opting to stay in salaried jobs in order to keep up with their loan payments.
Then there's the growing number of new and old economy jobs, from computer programming to natural gas drilling, that don't require a traditional four-year college or grad school education.
No matter how good the American higher-education product is, the Obama administration is starting to feel the sticker shock that parents have been feeling for decades.
And that means the party is almost over.
Commentary by Jake Novak, supervising producer of "Street Signs." Follow him on Twitter