This article was reported by Scott Carlson, Kathryn Masterson, and Jeffrey Brainard, and written by Mr. Carlson.
For the nation’s elite private colleges, $50,000 is fast becoming the new normal.
Fifty-eight private colleges now charge at least that much for tuition, fees, room, and board, a Chronicle analysis of College Board data shows. Last year only five colleges did.
Generous aid packages on some campuses mean that many students pay far less than those prices, which do not include textbooks and travel expenses. But a number of students do pay full freight.
The $50,000 price point might be merely a psychological milestone—after all, the cost of living is going up all the time. But in recent years, the cost of a college education, which is often equated with social, economic, and cultural advancement, has grown at a much faster rate than have the prices of other goods and services. Some critics fear that if costs go much higher, more and more families will feel priced out.
“We are heading for a precipice and likely to get there sooner rather than later,” says Bill Conley, dean of enrollment and academic services at the Johns Hopkins University, where tuition, fees, room, and board hit $51,690 this year. “It’s not far away.”
Others disagree that college prices are anywhere near a ceiling, and data from recent years suggest that prices will only continue their steady ascent. Six years ago, only two colleges set their tuition, fees, room, and board above $40,000, according to a Chronicle analysis of unranked data provided by the College Board. This year, the analysis shows, 224 are above that mark.
Still, many of even the most expensive institutions have seen no drop in demand even as family incomes are strained, in part because colleges have increased their financial aid at a faster rate than their tuition and fees.
Nonetheless, some observers worry that the escalation in sticker price is unsustainable, both for families and for institutions, whose aid budgets continue to swell. Sandy Baum, an economist at the College Board, says that while prices at private colleges are increasing at a slower rate than at public ones, institutions “really need to take this cost-cutting more seriously.”
“It’s clear private colleges are making a very big effort to hold tuition increases down,” she says, but adds that colleges will need to consider deep structural changes to curb rising rates.
The Real Cost?
The College Board’s data show “list prices” for tuition, fees, room, and board at about 1,000 private institutions in 2009-10. Those prices range from around $5,500 at some seminaries and rabbinical schools to $55,788 at Sarah Lawrence College.
Behind Sarah Lawrence are Landmark College ($53,900), Georgetown University ($52,161), New York University ($51,993), and George Washington University ($51,775).
Sarah Lawrence and Landmark, a Vermont college for students with learning disabilities, are perennially at the top of the list of institutions with the highest prices, the Chronicle analysis shows, while Georgetown, NYU, and George Washington have been among the top 20 since at least 2003.
Tuition and fees make up the bulk of a student’s annual bill at the priciest colleges, while room and board generally runs $10,000 to $13,000.
According to the College Board, tuition, fees, room, and board at private nonprofit four-year institutions increased 4.3 percent this year, to an average of $35,636. (At public four-year institutions, average in-state list prices increased 5.9 percent, to $15,213, while out-of-state prices increased 6.0 percent, to $26,741.)
Many students receive need-based grants—often from the colleges themselves—or merit-based scholarships and other discounts. The College Board does not have data showing how much aid colleges are giving students this year. But The Chronicle analyzed College Board data to calculate the average grant offered in 2008-9 by 42 colleges whose list price for tuition, fees, room, and board was more than $50,000 this year. (The other 16 colleges over that level this year did not offer enough aid data last year to enable a calculation.)
Among the 42, the average grant per full-time student was just over $13,000. That means that the average bill last year for tuition, fees, room, and board, after grants, was about $36,000.
Some advocates for private colleges argue that the listed prices might create a false impression: that private colleges are unaffordable. Eight out of 10 students at private colleges get grants, says David L. Warren, president of the National Association of Independent Colleges and Universities. And a Naicu survey shows that private colleges increased their tuition and fees at the lowest rate in 37 years this fall, with many reporting strong enrollments.
“It’s important not to draw conclusions about affordability and access at private nonprofit colleges and universities based solely on list price,” Mr. Warren wrote in an e-mail message to The Chronicle.
Indeed, at an institution like Harvey Mudd College, which competes against the likes of the California Institute of Technology and Stanford University in science and engineering, many students pay much less than the listed price of $51,137. Almost 85 percent of the students get some kind of financial aid, with an average award of $20,345 (not including loans).
Building projects and competitive faculty salaries have helped drive up the college’s costs in recent years, says Maria Klawe, president of Harvey Mudd. She sees the price going higher still, unless the college is able to bring in some big gifts to offset its rising costs.
Harvey Mudd’s leaders, like those at other colleges, look at how much their peers charge for tuition and fees when setting their own rates. “So long as we’re staying roughly in the same range,” Ms. Klawe says, “we don’t worry about it too much.”
A Growing Concern
Others are more worried. Jane D. McAuliffe, president of Bryn Mawr College, says college costs have been a major topic of discussion this year among leaders of the costliest small colleges. “We are all concerned because we fear the loss of access for students who deserve this education but might be priced out of it,” she says.
Ms. McAuliffe wasn’t surprised that so many residential liberal-arts colleges, like Bryn Mawr, have now passed the $50,000 milestone, because they have been clustered together for years. Bryn Mawr’s tuition, fees, room, and board reached $50,034 this year, with an average grant of about $30,000, Ms. McAuliffe estimates.
This year the college saw greater need among incoming first-year students. Sixty-five percent received aid, with an average grant of $32,495. (Over all, an estimated 45 percent of Bryn Mawr students do not receive aid.)
Ms. McAuliffe says that the small liberal-arts model is expensive to maintain, and that such colleges will need to collaborate more to keep costs from going up further. Bryn Mawr is trying to save money by merging its public-safety department and dining services with those of nearby Haverford College.
Mr. Conley, at Johns Hopkins, sees a tipping point ahead, when a significant number of students start to turn away from the highest-priced institutions. He thinks colleges will have a better idea of a price ceiling in the next two or three years, as the impact of the recession becomes clearer. “If you’re expecting a family with an income of $150,000 to come up with $60,000 for four years, that’s just hard to believe,” he says.
But administrators have delivered similar predictions in the past, and the price of college has just kept going up. David W. Breneman, a professor of education at the University of Virginia, recalls his tenure as president of Kalamazoo College, in the mid-1980s. “I can remember one year we held our tuition increase to $5 under $10,000—we were terrified of going into five figures,” he says. “At that time, we were sitting around asking ourselves, Where does this end? Where is the ceiling?”
The ceiling apparently has yet to be reached. Before the 1980s, he says, people at private colleges had a rule of thumb: A year of private education should cost about the same as a new Chevrolet.
“You don’t have to pay $50,000 for a new Chevy these days,” Mr. Breneman says. “So somewhere in there we went off onto a different path.”
The Price of Ambition
Significant movement up or down the price list can be a sign of new ambitions and programs, or of large gifts that have kept tuition increases in check.
Bucknell University had one of the steepest increases over the past six years. Its tuition, fees, room, and board totaled $50,320 this year, a 22-percent jump over its 2003 figure, after adjusting for inflation. Kurt M. Thiede, vice president for enrollment management, says the increase reflects efforts in the university’s strategic plan, which included hiring more faculty members, reducing professors’ teaching loads, and increasing financial aid to improve student diversity.
Bucknell has seen a slight decrease in applications but has become more selective. Sixty-two percent of its students receive some financial aid, with an average grant award of $17,500. Students who take out loans still leave with an average debt of $19,000, a figure administrators want to control. To help that, the university has collaborated with nearby community colleges to offer students a less-expensive option for their first two years.
Colleges set their tuition and fees after considering many variables. Starting out with the figures from the previous year, they factor in the costs of new programs and buildings, as well as salary increases to attract and retain faculty and staff members. Before they set a new figure, they also look at increased prices in their peer group. No one wants to be an outlier; in fact, many top private colleges differ in price by as little as $100.
William F. Massy, a professor emeritus of business administration and education at Stanford University and a former chief financial officer there, says striving for new programs and higher quality is one of the driving forces behind price increases. Pushing for improvement is a good thing, he argues. He doesn’t expect tuition increases to slow, noting that elite colleges haven’t seen significant declines in enrollment.
If anything, he believes, more colleges will join the ranks of the most expensive. He points to what is called the “pricing umbrella": Increases among the top private institutions, which have the market power to charge high tuition, give shelter to colleges below them, allowing them to increase tuition as well.
When one college crosses a price threshold, he says, “it’s easier for the next one to cross it.”
Feeding the Beast
Ronald G. Ehrenberg, an economics professor at Cornell University who studies higher education, frequently likens colleges to Cookie Monster, a ravenous beast who consumes resources as fast as it can. But with families’ savings accounts reduced and unemployment still high, he believes the increases in colleges’ list prices are reaching an end.
“Even before we hit this current recession, there was grumbling in Congress that the elite institutions were hoarding money,” he says. “While there is understanding politically that the publics have to raise tuition to help them exist with great cutbacks in state support, I don’t think that the privates are going to be treated well politically if they keep raising tuition substantially above the rate of inflation.”
Sara Goldrick-Rab, an assistant professor of educational policy studies at the University of Wisconsin at Madison, sees things differently. “We’re nowhere near the point where colleges have trouble filling their classes"—the only pressure that could stop increases, she says. “If anything, the admissions rates keep getting lower and lower, because they have more applicants.”
“I have a feeling that number is a lot closer to $100,000 than we are right now. It’s scary.”
Certainly people will watch Sarah Lawrence, as the price leader, to gauge where tuition might be going. Tom Blum, vice president for administration, says that the college’s charges for tuition, fees, room, and board are higher than those of other colleges because of its low student-to-faculty ratio, relatively small endowment, and location in the pricey New York City metropolitan area.
Conversations about the 2009-10 tuition increases at Sarah Lawrence started last year and were more intense than ever, he says. “There was concern expressed in the boardroom that we were approaching that tipping point” at which the demand would drop off, he says. As a result, the college raised tuition 3.5 percent, its lowest increase in many years. It also gave financial aid to 52 percent of students, up from 45 percent, with an average award of $27,500.
After years of holding steady in the number of applications, the college saw a 23-percent dip for this academic year—but enrollment grew slightly. People still see a value in a private liberal-arts education, Mr. Blum says, and the college’s price could still go up.
“The trend data,” he says, “would suggest that we’re not about to run into a wall.”
Colleges With Consistently High List Prices
These eight colleges charged among the top 20 highest published totals for tuition, fees, room, and board in each of three years: 2003-4, 2008-9, and 2009-10.
Columbia University
George Washington University
Georgetown University
Johns Hopkins University
Landmark College
New York University
Sarah Lawrence College
Wesleyan University
Source: Chronicle analysis of unranked data provided by the College Board
