Education can occur anywhere, in an office building, in a warehouse, or on the internet, but students, their parents, and their employers often prefer higher education on a College or University campus. Faculty like campuses because they are conducive to research. There are other reasons for a traditional campus, among them the signaling model as suggested by Bryan Caplan. Another is that iconic campuses imprint memories, and memories create endowments. This was one of the justifications for building an on-campus stadium at the University of Minnesota, rather than cooperating with the Vikings.
A campus that has the the appurtenances of a classical college: medieval architecture, bricks or stones, a quad, and a bell-tower seems to be preferred. These are the icons of the modern university.
In the Greater Twin Cities, we have been dealt a large number of college campuses. Minneapolis is a college town in a way that most people don’t realize, much like Boston, where more than 10 percent of the population is undergraduates.
I of course work at the University of Minnesota, which is famous for its classical Cass Gilbert quad (apparently derived from Jefferson’s University of Virginia and McKim, Mead, and White’s Columbia University). There are a number of other old buildings, though recent administrations seem allergic to nice architecture, and instead build mediocrity.