Newspaper article International Herald Tribune

U.S. Colleges Hit by Drop in Fees and Enrollment

Newspaper article International Herald Tribune

U.S. Colleges Hit by Drop in Fees and Enrollment

Article excerpt

The findings, in a survey by Moody's, are the latest sign of the financial turmoil hitting higher education.

In the latest sign of financial turmoil in higher education, an annual survey of U.S. colleges and universities has found that a growing number of schools face declining enrollment and less revenue from tuition.

The survey, by the credit reporting agency Moody's, found that nearly half of colleges and universities that responded to the survey expected enrollment declines for full-time students, and that a third of the schools expected tuition revenue to decline or to grow at less than the rate of inflation.

Analysts at Moody's say the problems are particularly acute at smaller, tuition-dependent schools and lower-rated universities, which have less ability to raise prices or attract students.

"The cumulative effects of years of depressed family income and net worth, as well as uncertain job prospects for many recent graduates, are combining to soften student market demand at current tuition prices," said Emily Schwarz, a Moody's analyst and lead author of the report, in prepared remarks.

The growing financial challenges for colleges and universities come at a time when students have collectively amassed more than $1 trillion in debt, and many of them are struggling to pay their bills. Nearly one in six people with an outstanding student loan balance is in default, the U.S. government says.

Before the financial crisis, colleges and universities routinely increased tuition fees and saw little impact on the number of applications. Indeed, some private colleges said that raising their price actually increased the number of applicants, apparently because families equated higher prices with quality.

That attitude has changed, in part because family incomes have declined. …

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