At least at some points in the past, this was a significant funding source for universities. (In the US, not sure about outside of it.) The number of engineering schools founded by American industrialists is probably not coincidental, either.

That companies no longer feel the need to invest in universities in order to ensure a steady supply of workers suggests one of two things: (1) either the planning horizon of private companies has contracted to such an extent that they are no longer willing to make such a long-term investment, or (2) they believe they can just hire sufficiently skilled graduates without investing in the "supply chain" that produces them.

Argument 1 is largely a financial question, because it hinges on the long term discount rate; Argument 2 is essentially political, in that it assumes the ability to hire graduates from a large, slack labor pool outside of its immediate community in which it might otherwise invest. My guess is that both of these have played a role in declining private-sector funding of educational institutions vs. the early 20th century and prior.

They do, in a way, by paying higher salaries for the graduates they really want. Some companies also pay tuition for employees going to school.

> Since that is unrealistic, the ultimate solution would seem to be making higher education free, like the rest of the civilized world.

Great Britain doesn't have free higher education.

"Make higher education free" is certainly a worthy goal. But there needs to be some debate for how to get there. "The government pays your tuition" is unlikely to find much support outside of a certain age bracket.

Something to consider: German universities are free to everyone who passes an entrance exam [1]. But German universities also spend half the amount per student per year as US universities[2]. $10,164 vs $23,064. They also spend more on R&D proportionally, and in absolute terms per student-year.

1. https://en.wikipedia.org/wiki/Education_in_Germany#Tertiary_...

2. https://www.oecd.org/edu/EAG2014-Indicator%20B1%20(eng).pdf (page 215)