Growing Number of Colleges Take Bite Out of Tuition Hikes

With annual tuition and fees at Princeton University this year costing as much as a Ford Explorer, no one would accuse the Ivy League school of being a bargain.

But at a time when the cost of attending US colleges and universities is growing at three times the rate of inflation, some creative cost-cutting measures have found their way to even the most prestigious and wealthy schools.

For the 1996-97 school year, Princeton's tuition, room and board, and related fees will total $28,325. But despite the platinum price, a Princeton education this year will cost just 4.6 percent more than last year - the lowest increase in tuition in 30 years.

After allowing annual double-digit increases in the 1980s, universities are now striving to do what Princeton has done: keep tuition increases below 5 percent. Harvard and Yale did it this year, and the University of California system managed to keep its 1996 tuition at the 1995 level.

"Moderating the rate of increase of Princeton's tuition is the No. 1 priority of this president, Howard Shapiro, and the board of trustees," says Princeton spokeswoman Jacquelyn Savani.

It's perhaps proof that higher education is becoming a luxury when 5 percent increases - still twice the inflation rate - are cause for celebration. But with the cost of technology and competitive professors' salaries, combined with scarce public dollars and declining enrollment due to a "baby bust," 5 percent is about as good as it gets, says David Merkowitz of the American Council on Education. "Historically, increases in college tuition have always outstripped inflation."

At Princeton, department heads were required to cut their budgets by July 1. The school enacted hiring "pauses," in which secretarial vacancies were left open for three to six months, and a hiring "frost" among high-salaried administrators. This meant that if a position became vacant, the school would try to eliminate it.

When the director of development left, the position was erased. When the speech writer became provost, the speech-writing position was cut. "The question was: Does Howard Shapiro really need a speech writer?" Ms. Savani says.

More schools are asking similar questions as they come under attack for allowing tuition to soar beyond the reach of average students. A General Accounting Office report released last month found that average tuition costs at four-year public colleges leapt 234 percent between 1980 and 1995; household income and consumer price inflation rose 82 and 74 percent, respectively, in the same 15 years. The report blamed rising administrative and research expenses and - due to a 14-percent drop in state aid since 1980 - a greater reliance on tuition as a revenue source.

As concerns spread that middle-income students will be priced out of an education, efforts by schools to moderate prices and attract students - without risking quality - have become a new mantra. In 1994, Michigan State University, in East Lansing, introduced the "MSU tuition guarantee," in which tuition increases over the ensuing five years would not exceed inflation.

Some schools give targeted discounts of up to $5,000 a year to children of alumni or in-state students. Others, such as St. John Fisher College in Rochester, N.Y., and the University of Missouri at Rolla, are guaranteeing jobs after graduation.

A few schools are even cutting tuition. Muskingum College (New Concord, Ohio) and North Carolina Wesleyan College (Rocky Mount, N.C.) reduced rates by 29 and 23 percent, respectively. Technically, neither school really cut tuition. Instead, they ended a decade-old practice of "discounting" - charging higher tuition but then giving most students back a portion through financial aid.

Muskingum decided to cut its $13,850 tuition by $4,000 - thereby dropping it below the psychological $10,000 barrier - but then cut the $4,000 financial aid grants it had been giving to three-fourths of its students.

Still, the school has garnered widespread attention for the move. Enrollment in this year's freshman class was 390, up from 288 last year, and the college is suddenly showing up on a number of "best-buy" lists.

College of New Jersey (formerly Trenton State University) also found its way onto Money magazine's annual list of best college values. The No. 5 ranking came after administrators recently defined a core mission - providing a quality education for about $10,000 a year - and stripped the school of any excess programs that didn't help meet that goal.

Sparsely attended courses are now offered once a year, not twice, and continuing-education programs deemed "costly and distracting" were cut.

Such trimming helped the school keep this year's tuition increase to 4.8 percent. "We're at a time when governors and even candidates for president of the United States are acting not just to level out taxes, but to cut taxes," says President Harold Eickoff, who relies on state funding for two-thirds of his budget. "If the money doesn't come from the state, it has to come from somewhere. And if the state funding goes [down], you're forced to go to tuition increases to keep up the quality of what you do."

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