The problem is that his ideas are pretty half-baked.
The first problem with this is often accurately but perhaps less than advisably explained in Latin: Post hoc, ergo propter hoc, meaning "after this, therefore because of this". It is also known that co-relation does not denote causality - or basically, a certain pattern amongst students does not define colleges as the cause.
S. Morris Engel's facetious example seems to almost parallel Santorum's:
More and more young people are attending high schools and colleges today than ever before. Yet there is more juvenile delinquency and more alienation among the young. This makes it clear that these young people are being corrupted by their education.And this isn't even taking into account that there are plenty of people who do not define themselves as "of faith" who are nonetheless - or in certain cases, thus - entirely ethical, responsible, members of society.
The second problem is that one of the roles of a good education is to challenge your opinion, not simply to reemphasize existing ones. Even if we discount Santorum's faulty logic - itself disappointing considering he's a fairly educated man - that there may be fewer people of faith, consider if there is a minority with a more established faith than ever before. Said another way: if college provides a test of faith, isn't this somehow preferable to faith because we simply don't know any different?
Santorum has clearly stated his opposition towards Iran simply because it is a theocracy; one can argue that if you went to an Iranian institution, you'd probably emerge one "of faith". And the ultimate short-sightedness of people like Santorum is to not see that the separation of church and state at the end of the day serves to protect the church from the state.
In not realizing that those like the ACLU protect the private rather public nature of faith, and the true test of faith lies on Santorum himself: in having faith in young people. A faith in them to be exposed to the real world and a range of ideas, some of which match his own, and some which do not, and with discussion and debate they will each find their own path forward.