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Colleges strive
to hold line on tuition
Boston Business Journal
January 23, 2009
With private
colleges and universities worried about cash-strapped
families not being able to foot next year's tuition bills,
many schools said they will issue smaller tuition and fee
hikes in the next academic year.
From Boston to
Worcester, tuition-driven institutions are planning tuition
and fee increases by percentages below what they issued last
year. Increases of tuition and fees at some schools will dip
lower than 3 percent - if they are indeed raised at all - as
presidents and finance officers focus on keeping retention
stable in the midst of economic chaos.
"We're
experiencing, like a lot of schools, the pressure of this
economy on our students," said Jack Calareso, president of
Anna Maria College in Paxton. Anna Maria typically raises
its tuition, fees and housing by 6 percent to 8 percent, he
said, but this year the increase will be set under 3
percent.
Thomas McGovern,
president of Fisher College in Boston, said the college's
pricing scheme this year will be more complex, with commuter
students seeing a 5.27 percent increase in tuition and fees
and on campus students seeing a 4.4 percent increase. In
either case, that's a smaller percentage than the previous
year's 6 percent increase.
Housing costs
will rise 2.9 percent, to $12,600 from $12,250.
"We're primarily
concerned with enrollment," McGovern said. "Without
students, we're not in business."
Some colleges
are taking even more drastic measures. Merrimack College
announced last month it would freeze tuition, fees and
housing costs for the next academic year. "The pressure,
from a simple business point of view, is to keep your costs
at zero as much as possible next year," said Merrimack
President Ronald Champagne.
Most colleges
set their increase to tuition and fees between February and
March, but several said expectations are that a large number
of private institutions will try to keep tuition and fees
costs as low as possible due to the uncertainty in the
marketplace.
Many families
have seen cuts to income and investments, while at the same
time the student lending market has contracted, making it
harder to pay for college educations, experts said.
"(Colleges) are
going to try to hold the line for recruitment purposes,"
said John Dysart, president of higher education consulting
firm
The
Dysart Group Inc.in
Charlotte, N.C. While 5 percent to 7 percent hikes in
tuition and fees have been common of late, Dysart said 3
percent to 5 percent increases will likely be more common in
2009.
Typically, when
colleges set annual tuition and fee increases,
administrators calculate the rate of inflation along with
other costs particular to higher education organizations,
such as faculty salaries and utilities. The Commonfund
Institute, which calculates the Higher Education Price
Index, set the average increase of operational costs for
private colleges in 2008 at 3.9 percent. The increase in the
Consumer Price Index for the year was 3.7 percent.
Nationally, the
average increase to tuition and fees for this past academic
year was 5.9 percent, according to the College Board, which
collects data on college pricing. In Massachusetts, where
schools are competing in a densely packed college climate,
costs can be steeper than elsewhere.
But in the
coming academic year, the mantra will be less is more.
"Everyone is
tightening their belts, biting the bullet," said John
Heinstadt, vice president of business finance at Wentworth
Institute of Technology in Boston. Wentworth has raised its
tuition by an average of 4.47 percent over the past three
years, but this year expects to increase it by less than 4
percent. Controlling costs, like salary increases, is one
way of making smaller hikes possible, Heinstadt said.
Another area of
concern for many private colleges and universities is
competition from public institutions, which often charge
much less, particularly for in-state students.
The
Massachusetts Board of Higher Education - which sets tuition
for all University of Massachusetts campuses, state and
community colleges - has kept a static tuition rate since
2000, said spokeswoman Eileen O'Connor. Individual schools
set their own fees, however, and for this past year the
weighted average increase at major UMass campuses was 3.6
percent.
That means that
total average costs for in-state undergraduate students at
UMass last year was $9,585. The average cost of tuition and
fees for private four-year colleges in Massachusetts was
$32,592 before scholarships. Those costs don't include
housing.
Nevertheless,
most private college administrators said they believe
smaller class sizes and speciality focuses will continue to
woo students. "If you are going to charge more you better
have a better story," Champagne said.
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