Obama and Student Loans

http://online.wsj.com/article/SB20001424052748704187204575101663745849200.html

"Both the House-passed bill and the President's budget increase Pell Grants and also create automatic future increases, so individual grants will grow faster than inflation every year. Colleges will pocket the money by raising tuition, so we have yet another federal program ensuring that higher education costs continue to rise even faster than health-care spending."

I don't get it. The entire point of the getting rid of the private lenders was to control the runaway costs. Now the private lenders will go away but prices will continue to rocket out of control. So this is just a giveaway to the colleges. Before it was a giveaway to the colleges and the private lenders. Now they just cut out the middle man but didn't fix the overriding problem of runaway costs.