Here's an example of actual cuts in tuition due to lack of demand for a law degree:

http://www.abajournal.com/news/article/u_of_iowa_to_cut_tuition_for_law_students_by_16.4_percent/

I'm using law school here as an example of higher education in general because it's the clearest and biggest example of higher education contraction that I've seen so far.

So, cost *can* decline.