it most certainly is true about loans. they have guaranteed money from the government. to a certain degree, michigan will charge in tuition what they can get.
on the one hand, the avilability of loans means more kids can afford school, otoh it drives up the price because schools know that money is there.
what's the solution? i dont know. you could ask schools not to be so greedy, or for them to trim their ridiculous bureaucracy, but we all know that's not going to happen.