Why is college tuition high, but academic salaries low? Where is the money going to? 

How can it be that interested students pay so much, but many academic salaries are so low (excluding the obvious full professor in a field where the industry pays for getting research results, like IT).
Supply and demand. The value of something is what people are willing to pay for it.


  Why is college tuition so high?


Because students will pay it anyway. If you headed the committee to decide how much tuition to charge, what would you base your decision on? You would probably want to charge as high as possible, since you're trying to bring in money for your school. And you would find (as many current committees do) that you can go pretty high and still have millions of students crawl over each other for the privilege of giving you piles of money.

Why would universities lower tuition? Top schools already dismiss 20 applicants for every one they accept, despite the insane tuition cost. Clearly, either education is an inelastic service, or there is a ridiculous shortage - either way, HYP could probably charge 10 times what they do now and still have no trouble finding students. I would say that the main reason they don't is a combination of concern for their reputation and a fear of being sued.

You may ask why the students are willing to pay so much; but that's an involved matter which is outside of the scope of this question.


  Why are academic salaries so low?


Because professors will take the job anyway. If you headed the committee to decide how much salary to pay, what would you base your decision on? You would pay as little as possible.

In many areas, money is the prime motivator. So, at least the top companies will pay top dollar for the best employees, because the best employees have a string of job offers lined up and you have to give them something extra to take up your offer over all the other. Unfortunately, it so happens that in academia, money is not a good motivator:


Most eminent professors are old and content and they couldn't care less if their professorship made them $75k or $85k - they'll still want to work at that one school that they like for the reputation and the work environment (like colleagues and quality of graduate students). The ones that do care about money probably have a side business that brings in huge sums of money which makes their salary look like peanuts in any case.
Small time professors are either terrified of being fired (if not tenured) or can't get over the conflict between their ego and their lack of recognition, so they will readily take a pay hit to work at a more desirable institution if it means they can increase their own prestige.
Post-docs and other grunts will take pennies to work for a slightly more famous institution, because they think the association is vital to getting a faculty job after their post-doc. I'm sure many of them would pay (if they can afford it) to work like crazy for a guy who is famous enough.
Grad students are... Well... Grad students. The typical PhD candidate, when told that his job is essentially slavery, smiles and acts like it's a hilarious joke (even though he acknowledges that it's true). Many grad students already do pay to work like crazy, and not even for famous people.


How do you convince a thrice Nobel prize winner to be professor at your institution and not Next Door U? Pay him an extra grand every month? He's got three Nobel prizes, he doesn't care. And since he doesn't care, you might as well pay him a pittance - and as a nice bonus, you can tell all the other wannabes "Look, even he gets paid so little! Be content with your salary!".

If you ask why professors don't care, the answer is easy: Most people who care about money realize by the time they leave college that becoming a professor is not an optimal strategy for making money. To be a "greedy" professor, one must essentially wake up on their 30th birthday, and suddenly decide that even though all their life they haven't cared about money at all, from now on, money will be their chief concern. People who are old enough to have earned a PhD rarely have their worldviews change overnight so drastically.


  Where is the money going?


Short answer: Admin staff, marketing, sports. Things such as cleaning staff and building maintenance are also factors, but crucially they are less dependent on the school budget. Whereas those three mentioned areas will benefit the most from budget increases (but perversely, academic salaries will be harmed the most by budget decreases).

For details: Depends on the university, and may be determined by consulting the annual financial report of the university.