Where will the money come from? Are you kidding me?! Try cutting out the multi-million dollar stadium renovations and the research facilities for starters. The college I went to NEVER seems to have trouble finding the millions for that. And I tell you something else pal: I don't have any sense of entitlement; my degrees are bought and paid for (and I got them without incurring any debt, although it took a million years). So I don't suggest this for my benefit at all. And there are other ways to fund education besides taxes (a lottery being one of them).
Nope, not kidding you. At most large (D-1A, BCS, etc) public universities, the athletics department is the only department that has a negative budget from the university. They bring in not only enough money to pay for the stadium and outrageous coach salaries, but they also contribute money to the general fund of the university. Sure, without those large expenditures on items unnecessary to education they could put more money into the education portion of the university, but the argument could be made that without spending the money on facilities and coaches, they wouldn't produce as much money in the first place.
As for rppearso's long, rambling answer...if you want to see how much an unsubsidized education should cost, just look at private schools. When the students have to pay for ALL costs of running the university (facilities, faculty, staff, supplies, overhead, etc.), tuition is FAR higher than at public, taxpayer-subsidized universities. And private institutions have an incentive to be lean/profitable in their operations. Sure, they can raise tuition to cover extra expenses, but once they raise the price too high, demand will drop. Despite your assertion, even education services follow supply and demand curves. As is the norm with government, their subsidy does nothing but artificially shift the curves.