Ceiling for Tuition Hikes

Middlebury College's president, Ronald D. Liebowitz, wants to take away some of his own flexibility. Starting this year, under a plan that Middlebury's board is expected to approve, the college will plan its budgets each year by capping its "comprehensive fee" -- the equivalent of tuition, room and board at other private colleges -- at an upward limit of 1 percentage point above the Consumer Price Index.

One percentage point above inflation might not seem like much to celebrate for students and parents facing the bills, especially at institutions like Middlebury, where charges top $50,000. But if Middlebury sticks to its policy, it could result in a slowing of increases that have typically run well above the inflation rate at such colleges.
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College Tuition Will Not Stop Rising

DINO GRANDONI AUG 16, 2011968 ViewsComments (7)

Here's a chart that helps explain why the value of a college degree has been so hotly debated.  Moody's, in a study (PDF) on student lending, has found that tuition costs have more than doubled since 2000. Inflation in the price of tuition has outpaced the inflation rate for all goods, as well as those specifically of housing, energy, and health care (yes, even health care) for two decades. In other words, since 1990 college has become much more expensive relatively to most of the other essential goods and services Americans consume, which has fueled critics like PayPal founder Peter Thiel and hedge fund manager James Altucher who argue that schools are sending their graduates into a tough job market saddled with debt they will have a difficult time repaying. Even Moody's report says that "Fears of a bubble in educational spending are not without merit."

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Putting a Limit on Tuition Increases

By JACK KADDEN

Everyone complains about the steep and seemingly unending rise in tuition. Now, one college is responding — in a modest way.

As the article points out, “one percentage point above inflation might not seem like much to celebrate,” but it could be a first step toward reducing the rate of increase, which often exceeds the inflation rate by several percentage points. Last year, the article said, the average increase for private four-year colleges was 4.4 percent, while there was no inflation at all. 
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