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Column: Will The Price of U.S. College Tuition Fall with Enrollment?

Student debt

(Reuters) – U.S. college enrollment is declining. That may cause students and their parents to hope tuition costs will go down, but they should not count on that.

In classical economics, lower demand typically triggers lower prices, at least until unprofitable companies merge or go out of business and shrink supply. It does not necessarily work that way, though, in the world of higher education.

In the fall of 2012, published tuition and fees for in-state students at four-year U.S. public schools rose just 2.9 percent from a year earlier, the smallest increase in 33 years, the College Board reported. At private schools, published prices rose 3.8 percent, lower than the increases in recent years.

At the same time, the number of students enrolled in colleges and universities fell by nearly half a million after two decades of substantial growth, according to the U.S. Census Bureau.

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