Friday, January 23, 2009
Modified: Monday, January 26, 2009, 5:55am
Boston Business Journal - by Jesse Noyes
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 increases 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 to 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 to 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 and 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 with 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 the total average costs for in-state undergraduate students at UMass last year was $9,585. The average costs of tuition and fees for private four-year colleges in Massachusetts last year 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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