College tuition hikes lower than expected

As the recession deepened last fall and the value of college endowments melted away, some higher-education officials predicted that spring would bring the announcement of steep tuition hikes.

But that has not proved to be the case, at least at many private campuses.

Private colleges and universities in California and around the nation are announcing relatively modest tuition boosts, averaging about 4%, for the 2009-10 school year. That is among the smallest such increases in about 30 years and is in marked contrast to the rate hikes being considered at public universities in California and elsewhere, which are larger in percentage terms if not dollar amounts.

Still, some critics contend that most private schools should not have raised fees at all this year, since annual inflation is below 1% and many families are struggling with unemployment and shrunken investments. About a dozen mainly small colleges around the country have taken pity on students and announced tuition freezes.

Officials with other private schools said they could not freeze tuition and maintain academic quality but worried that large tuition increases might spark a student exodus to lower-cost public institutions. So to cope with reduced endowments and donations, schools have instituted hiring and construction freezes rather than large tuition hikes. Many also are increasing their financial aid budgets as the overall cost for top-ranked schools nears $49,000 a year, including room and board.

USC, for example, plans to raise its undergraduate tuition for the coming year by about 3.9%, to $38,570 before living costs, while also increasing money available for financial aid by 8%. The percentage rise in tuition is the smallest since 1969, according to Elizabeth Garrett, USC’s vice president for academic planning and budget.

USC’s leaders “were concerned about the effect of the economy on the ability of families to afford sending their kids to college,” she said. “I think every institution in the country is cognizant of the financial challenges everybody is facing right now.”

Pepperdine University’s 2.9% increase in undergraduate tuition is the smallest percentage hike in 25 years, officials said. “Obviously, a big driver is the current economic situation. We had to figure out a way to make coming to Pepperdine realistic for our students and applicants. And certainly a modest increase in tuition was one of those strategies,” said Michael Truschke, dean of admission and enrollment management at Pepperdine’s undergraduate Seaver College.

Other California campuses with lower-than-usual tuition fee hikes include Pomona College, 3.9%; Loyola Marymount University, 4.4%; and Occidental College, 5%. Elsewhere, such schools as Carnegie Mellon, Duke and the University of Pennsylvania are touting increases of less than 4%.

In recent years, private-college tuition across the country rose an average of about 6% annually, according to the College Board.

“Private colleges are always able to compete well on value. Increasingly, given the recession, they are feeling greater pressure to be competitive on price,” said Tony Pals, a spokesman for the National Assn. of Independent Colleges and Universities. Preliminary results of a national survey found that tuition hikes are averaging 4.2% for next fall and that schools are boosting financial aid funds by 9.2%, he said.

Among the dozen or so colleges freezing tuition at 2008-09 levels are Yeshiva University in New York, Hillsdale College in Michigan, West Virginia Wesleyan College and Merrimack College in Massachusetts.

Some critics say that more schools could have frozen fees if they had cut administrative costs more deeply and required faculty to teach more courses.

Richard Vedder, director of the Center for College Affordability and Productivity, a Washington think tank, said the relatively small fee hikes at colleges this year are not motivated by altruism but by fear of political heat and parental anger. Schools continue to “raise tuition as much as they can get away with without a backlash against them,” he said.

The picture is more mixed at public universities, which face reduced tax support and uncertainties about federal stimulus funds.

Next month, governing boards of the University of California and the Cal State systems will consider raising annual basic fees by 9.4%, or $662, and 10% or about $300, respectively. That would bring an average UC undergraduate bill to $8,670, not including housing, books and other expenses, which can add up to $12,000 to $14,000. Average undergraduate fees for Cal State would be $4,150, not including living costs.

Nationwide, most public colleges are expected to raise fees between 4% and 9% for the coming year, according to Daniel Hurley, director of state relations and policy analysis for the American Assn. of State Colleges and Universities. There will be wide variations, he said, ranging from proposals to freeze tuition in Maryland to hikes of up to 15% at some Florida schools.

Hurley said he expects enrollment demand to increase at public colleges because even with such fee increases, they remain much cheaper than private colleges. “Even during these tough economic times, students and parents are willing to pay the additional costs so long as they have access to seats in classrooms with a high-quality instructor at the front,” he said of the public schools.

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larry.gordon@latimes.com