So the price of college is high. And attendance has been growing, especially among Hispanics. When you have increasing price and increasing quantity sold, Econ 101 tells you that what you're seeing is a shift in the demand curve. Lots more people want to go to college, and they are willing to pay more. The reason for the increase is not surprising -- it's the college wage premium, combined with low unemployment among people with a college degree. No wonder everyone wants to hop on that gravy train, even if it means shelling out big bucks up front.

And we can only expect demand to increase, especially if we do what we ought to do and let in a lot more high-skilled immigrants. Those immigrants will be great for the economy, but their kids are going to be competing with native-born kids for college spots. Unless we do something, that competition could cause a xenophobic backlash among the high-skilled native-born, as well as driving up tuition even further.

What do you do when you have a big increase in demand for a product? Well, if you're a company, you probably ramp up supply. That will increase quantity sold, and bring prices down. But how can the supply of college seats be increased?

The private sector has had a devil of a time providing quality college education. Sorry, University of Phoenix, but you haven't managed to command the prestige of the University of Arizona. It may be that college is just something that nonprofits are better positioned to provide than for-profit firms. Another effort to bring college to the masses is online education. This is more promising. But while online courses can be great for transferring specific skills (like coding), they inherently can't provide many of the essential kinds of "human capital" offered by real, in-person college -- human networks, career ideas and perspective, one-on-one mentoring, and of course personal growth. It is no coincidence that "college" comes from the word for "community."

So here's my idea for increasing the supply of college: A system of federal universities. Currently, we have no such system, but it is not unconstitutional. After all, the federal government runs the United States Military Academy at West Point. My idea is simple: The federal government provides start-up funding for a large number of new universities, offering attractive salaries to professors.

Why federal universities instead of state universities? State spending is likely to focus on the existing state university systems. But that will have a limited impact on total college availability, for two reasons. First, increased state funding for existing universities may simply displace alumni funding or tuition funding. That could lower the net price of college, but would have a limited impact on enrollment. Second, there are many geographic areas that don't yet have elite universities, or only have a few (Ohio comes to mind, as well as much of the Southwest and the Pacific Northwest). Federal universities could fill these gaps. Finally, it's very difficult to coordinate policy between states, and if we want to create new universities on a large scale, only federal government can do it.