The Tuition Tamers

By Flora Tartakovsky

These have been the best of times for many of the nation's top universities--and the worst of times for middle-income families struggling to afford them. Thanks to a robust stock market, school endowments have ballooned. Yet few institutions have held down steep increases in tuition. But that may be changing.

Williams College, a prestigious liberal-arts school in Massachusetts, announced last month that for the first time in 46 years, its tuition would remain steady at $31,520. Last week students at Princeton University learned that their annual $31,599 tuition, room and board will rise just 3.3%--the smallest hike in 30 years.

These shows of restraint may signal a turnaround from the whopping tuition increases of recent years, as some schools now consider using their endowments to control price hikes. Since 1980, college costs have more than doubled, after adjustment for inflation, while the median income of families with college-age children has increased only 12%. Last year tuition rose an average of 4.6%, the lowest jump in 12 years--but still more than twice the rate of inflation. "Remaining affordable for middle-class parents is the 800-lb. gorilla facing colleges and universities," says Terry Hartle, senior vice president of the American Council on Education in Washington.

Williams held its tuition flat by paying more of its bills with the investment profits on its $1.1 billion endowment and with contributions from alumni. But college officials who oppose using endowments to freeze tuition say the students most vulnerable to hikes are not affected by them. "If we were to keep tuition constant, would it change the situation here for students in need?" asks Princeton president Harold Shapiro. "No, because their tuition is fully covered." The school plans to boost scholarships to needy students this year as much as $2,250 a person.

To be sure, there is no shortage of families who can afford elite institutions. Despite annual tuition hikes at Harvard, its applicant pool swelled from 13,029 in 1992 to 18,167 last year. Families that equate price with quality have allowed costs at elite schools to be on "autopilot," says Gordon Winston, an economist at Williams College. Most wealthy families can afford the high tuitions, and poor families get financial aid, but middle-income families get squeezed--and even squeezed out.

One reason colleges are curbing tuition increases is to attract those middle-income students. Rice University in Houston uses its $3 billion endowment to guarantee that tuition for sophomores, juniors and seniors will not leap ahead of the consumer price index. Another reason for restraint is concern that public outrage will prompt government intervention. Congress is already tackling the issue during two days of hearings this week, and President Clinton recently proposed a $31 billion package to make higher education more affordable. Now if only someone could do something about campus parking.

--Reported by Ann Blackman/Washington

With reporting by Ann Blackman/Washington