Is college tuition finally shrinking?

With family incomes failing to keep up, more colleges are holding back on tuition jumps.

By Aimee Picchi Jan 11, 2013 9:23AM

Image: Graduation cap (Stephen Wisbauer/Getty Images)With family income failing to keep up with the steep price of a college education, demand for four-year degrees is weakening, according to a new report from Moody's Investors Service. 

That's leading to more colleges holding back on tuition increases and giving out larger scholarships to lure students, reports the Wall Street Journal.

While this will be positive news for parents of children in the college-age or younger set, it's not so healthy for higher education: a third of the 292 schools in Moody's survey said they believe net revenue will fail to keep pace with inflation in the current fiscal year. 

Universities and colleges are facing pressure from many fronts. The average graduate leaves with debt of $25,250, and today is facing a tough job market. That's led some to question the value of a degree. 

Traditional colleges are also facing competition from online classes -- with even Ivy League and other top-notch institutions getting in on the game. Harvard and MIT have started edX, a non-for-profit that offers classes on topics ranging from statistics to philosophy, for free.

At least two dozen private colleges froze tuition last year, more than twice the number in 2011, the WSJ notes. 

Wittenberg University, based in Springfield, Ohio, was one of those schools that froze tuition. Its tuition will remain $37,230 for the 2013-14 academic year.

"If colleges do not adapt to shifting demographics and the weak economy making families more price sensitive, there will be fewer institutions," Wittenberg University President Laurie Joyner told the publication. 

More on Money Now

Tags: Economy
Jan 11, 2013 2:24PM
Now if the government would stop giving away so much money, just think how much less it might cost to go to college.
Jan 16, 2013 11:38PM
When I went to college, the tuition was $50 per semester at all state colleges. With lab fees, activity card, and such, it came to about $81. Books were high but normally less than $150 and you could resell them for half price.
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