Four years ago, Southern California and the nation were still deep in recession,but you wouldn't have known it from the escalating tuition prices at the area's private colleges and universities, including Woodbury University in Burbank.
With housing values down and unemployment up, Woodbury hit its students with an 11.4% increase in tuition and fees that year, about double the rate of inflation. Indeed, tuition has risen among private institutions nationwide at about double the rate of inflation, on average, during the past decade.
Now, however, those freewheeling pricing practices by private colleges and universities appear to have skidded to a halt. And there is no better sign than Woodbury's recent announcement that it will freeze its $13,020 annual tuition and fees for 1995-96.
"We have students who come primarily from the middle class, and they just can't afford it," said Woodbury University President Paul Sago. "We were going to price ourselves out of the market we're here to serve."
The school--specializing in business, design and architecture--has had smaller tuition and fee hikes since 1991, including 7.4% this year. But Sago hopes that the tuition freeze in the coming year will boost enrollment by at least 100 students, providing even more revenue than another price increase.
At Woodbury, Sago described a spiral of tuition hikes and the resulting increases in school-funded scholarships that has caught many campuses in recent years. But he said that private schools cannot continue that cycle, as prices climb and the value of government financial aid shrinks.
The decision by the 1,062-student campus to forgo any tuition increase--virtually unheard of in the past--is part of what experts say is a growing trend by private institutions nationwide to try to combat public perceptions of "sticker shock" in higher education.
"Ten years ago, had any college or university done that, the response would have been they're nuts. Now, a lot of institutions are saying that's an interesting thing," said Jonathan Brown, president of the 73-member Assn. of Independent California Colleges and Universities.
Although tuition freezes remain rare, private institutions are increasingly looking at various discounting schemes. Some are visible, such as guarantees that tuition hikes will not exceed inflation. Others are more hidden, such as large increases in college-funded financial aid.
Mills College in Oakland also froze its $14,100 annual tuition this year and last; Pepperdine University in Malibu this year began marketing a three-year degree program, and Stanford University's 5% tuition hike this year is half of what it was two years ago.
Elsewhere, Rice University last year announced a policy to limit student tuition increases to the rate of inflation once they enroll; Lehigh University is offering top students a free fifth year, and Bennington College, one of the nation's most expensive, has announced plans to reduce its tuition.
In a bid to compete with less expensive public universities, growing numbers of private schools--including Occidental College in Los Angeles--have begun guaranteeing students who follow guidelines that they will graduate in four years, or the universities will pay for any extra classes.
Average student tuition and fees at private four-year campuses this year hit $11,709, with dorm fees, books and other expenses boosting the total to $18,784. In contrast, public universities had average costs of $2,686 for tuition and $8,990 total for on-campus residents.
But the average tuition increase for students at U.S. private four-year institutions this fall was only 6%. There has not been a smaller increase in the private sector in at least 15 years, according to an annual survey by the College Board.
Educators expect private tuition hikes to remain modest in the coming years, citing broader changes in the private higher education marketplace. The simplest is a major decline in inflation, which was only 1% in Southern California during 1994, the lowest annual rate in decades.
Also, the pool of U.S. high school graduates in recent years has hit 30-year lows, spurring intense competition for students. Although California has seen less of a decline, some private universities say they are having to admit less-qualified students by digging deeper into their "wait lists."
Educators have been feeling a backlash over annual costs at some private institutions that now exceed $25,000, including room and board. Many say it began with former U.S. Education Secretary William Bennett's harsh criticism of academia during the late 1980s.
"I think during the 1970s and 1980s, that was a bit of a boom time for higher education. I think pricing was not a major concern for universities or parents," said David Davenport, president of Pepperdine University, where total annual student costs this year are between $25,000 and $26,000.
"Now, what I think is happening is we are realizing there are limits on what parents are willing to pay. Now what colleges are beginning to do is say, 'What is the price our market is willing to pay?' " said Davenport, who is also chairman of the California private colleges association.
Many educators say the tightening private higher education market has affected both prestigious and lesser-known schools, but in very different ways. The top campuses probably could still name their own prices, but have been forced to limit their increases to avoid political embarrassment.
Other institutions--good schools but without the same market cachet--tend to be more involved in the discounting schemes.
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Tuition and fees have risen among four-year private institutions nationwide at double the rate of inflation during the past decade, as measured by the consumer price index. Some educators consider that comparison inaccurate, and prefer the "higher education price index." That comparison shows a slightly smaller increase, compared to inflation.
Source: The College Board, Research Associates of Washington.