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NEW LONDON, N.H. — Bright fall hues and neatly manicured lawns frame redbrick buildings and a white wooden church steeple on a peaceful New England main street with a view of the White Mountains in the distance.

It’s an unlikely setting for a high-stakes gamble that could help drive dramatic change to a contentious issue: how, and how much, Americans pay to get a higher education.

Colby-Sawyer College, a nearly 200-year-old institution that inhabits a campus in the heart of this bucolic scene, has announced that it will lower its tuition next year for undergraduates by 62 percent, from $46,364 to $17,500.

The move is among the first of what experts are predicting could be many colleges’ so-called tuition resets. Other schools are adjusting what they charge in different ways.

Already, as enrollment erodes and public skepticism mounts about the need for a degree, the pace of annual increases in tuition and fees — which for years rose three times faster than the cost of everything else — has for the first time since the early 1980s slowed to a rate that’s well below inflation.

Now some higher education institutions are starting to lower their prices.

“There was a time when colleges and universities could price with impunity, when there was always sufficient demand that they could raise what they charged and be sure that people were going to find a way to pay,” said Will Doyle, a professor of higher education and chair of the Department of Leadership, Policy and Organizations at Vanderbilt University’s Peabody College of Education and Human Development. “But that time appears to be over.”

College is still expensive. Taken together, tuition, room, board, books and other expenses this year average $57,570 at private, nonprofit colleges, according to The College Board. At public universities, the average comes to $45,240 for out-of-state and $27,940 for in-state students. That’s a big chunk of Americans’ yearly $70,784 median household income.

Annual increases in the cost of college long surpassed inflation. In the 10 years through 2016, college tuition and fees increased by 63 percent, or three times as much as all the other products and services measured by the government, the Bureau of Labor Statistics reports.

Credit: Davin McHenry

But as enrollment has eroded, these price hikes have slowed. Tuition and fees rose less than 1 percent from September 2019 to July 2021, a period during which inflation was more than 7 percent. This fall, the increase in tuition and fees at public universities and colleges reached a “historically low” level, according to The College Board, and actually declined when adjusted for inflation.

Though most institutions won’t announce their tuition for next year until spring — and are contending with inflation and increasing labor costs themselves, along with lower returns on their endowments — experts are projecting more of the same.

As many as 100 colleges may lower their prices, said Jim Hundrieser, vice president of the consulting arm of the National Association of College and University Business Officers, or NACUBO.

Like Colby-Sawyer, for example, Lasell College in Massachusetts has announced a hefty tuition cut — in its case, of about a third.

Fewer than one in five families understand that the “sticker price” colleges put on their websites and in their catalogs is almost certainly more than they will have to pay, and six in 10 say it’s made them walk away without even bothering to apply.

Other institutions are guaranteeing that students will pay the same tuition for their entire time in college, without annual increases. Still more are expanding their financial aid, so no students have to take out loans for tuition if their families earn below a certain clearly designated cutoff.

Among the reasons for these changes, Hundreiser said: Higher education leaders have come to understand that the cost “has eclipsed what’s realistic.”

But families’ ability to pay is no longer the only factor in deliberations over price, he said. For the first time, colleges are worried about consumers’ willingness to pay. Fewer than one in three Americans surveyed by the Strada Education Network now think a degree is worth the cost.

Related: How higher education lost its shine

Consumers are also increasingly frustrated by the confusing way that colleges and universities explain their prices, advertising a figure that few if any families actually pay and making it hard to tell how much financial aid is in the form of scholarships and how much requires taking out loans.

Fewer than one in five families understand that the “sticker price” colleges put on their websites and in their catalogs is almost certainly more than they will ultimately face, and six in 10 say it’s made them walk away without even bothering to apply, a survey by the college loan company Sallie Mae found.

That’s the main thing Colby-Sawyer is trying to address, its president, Susan Stuebner, said.

“The question was, how many families are we missing? How many families are we not having conversations with because they get scared off?” said Stuebner.

Susan Stuebner, president of Colby-Sawyer College. “How many families are we not having conversations with because they get scared off” by a high list price none of them will pay? she asks. Credit: Vanessa Leroy for The Hechinger Report

After discounts and financial aid — what higher education insiders call the discount rate — most Colby-Sawyer students were already paying the new lower price. So the college decided to be honest about it, Stuebner said.

“It was just time to get off this high-price, high-discount roller coaster.”

Nationwide, last year’s discount rate was a record 55 percent for incoming students, according to NACUBO. At 154 colleges and universities across the country, including Colby-Sawyer, not a single student pays that list price, a Hechinger Report analysis of federal data found.

“A lot of it has to do with psychology,” said Stuebner. “The fact that my kid got a $30,000 scholarship to go to this school — they must really like my kid.”

Even though one Colby-Sawyer parent’s child will now pay the same amount as before the price change, she said, he called after the announcement and asked what happened to the student’s scholarship.

“Everybody likes a trophy, and that trophy is the scholarship,” Hundrieser said.

That’s one reason colleges have seldom previously risked lowering their prices. Among the few that have, some experienced the paradoxical result of getting fewer applications, at least after an initial bump.

Tuition resets of the past “have proven to have a short-term gain, which lasts typically two-ish admission cycles, and those institutions then struggled,” Hundrieser said. “I’m sure there are some places where it’s worked, but I don’t know of a school where they didn’t come back a few years later and raise the price again.”

Related: The unasked question about the student loan bailout: What’s colleges’ responsibility?

People like to think they’re getting a deal, said Janine Davidson, president of Metropolitan State University of Denver.

“I hear this from my colleagues: ‘Well, this school didn’t offer my kid what that school did,’ ” Davidson said. “It’s about pride. It’s about respect.”

Another worry is that families will be suspicious of a college that’s significantly cheaper than its competition. “There’s this perverse belief that high price equals higher quality, and it really does surprise me how strong that psychology is,” Stuebner said.

Colby-Sawyer itself is trying to preempt another hazard: speculation that it’s lowering its price because it’s in financial peril. “Is the college in trouble?” reads the most surprising of the frequently asked questions about the price cut announcement on its website.

The answer, Stuebner said, is no. Since running a deficit in 2017, the college has had balanced budgets, the most recent publicly available financial documents confirm, and its endowment has increased to $62.4 million. It broke ground on a $2 million athletic pavilion in October, and demolition is under way on an old science building that will become the site of a $15 million School of Nursing and Health Sciences building to house new graduate programs in high-demand health fields.

Still, undergraduate enrollment at the school has fallen steadily, from 1,414 in 2012, U.S. Department of Education figures show, to what a college spokesman says is 777 this fall. And Colby-Sawyer is the kind of small regional institution most at risk from a decline in the supply of students that’s worst in the Northeast and the Midwest.

Similar enrollment challenges have hastened the closings of 121 private, nonprofit colleges in the last decade, according to the U.S. Department of Education.

Many of the rest are still resisting lowering their prices.

“A lot of it is just fear of change” — and of being the first to blink, said Stuebner, in whose office is a plaque that reads: “If you change nothing, nothing will change.”

Colby-Sawyer began as a two-year college that after 1928 enrolled only women, and has already been through two big transformations since then. It started offering bachelor’s degrees in 1943 and began admitting men in 1990. Stuebner said a member of her board of trustees told her, “This is the biggest decision this board will have to make since we went co-ed.”

At an open house after the tuition reset was announced, she said, half the students and their parents said they came because they’d heard about it. The college plans a marketing blitz and will advertise its price cut on bus wraps, subway stations, streaming platforms, public radio and elsewhere.

Megan Stackhouse, a sophomore at Colby-Sawyer College. She has mixed feelings about the decision by the college to lower its price. “People will think it’s not as prestigious. But it will also be more accessible to people,” says Stackhouse. Credit: Vanessa Leroy for The Hechinger Report

Reaction among current students to the vastly lower tuition was mixed.

“People will think it’s not as prestigious. But it will also be more accessible to people,” said Megan Stackhouse, a sophomore crime and legal studies major.

Thaddeus Marks, also a sophomore, agreed that the higher price he saw when he first considered Colby-Sawyer was a signal of prestige. “For me, you’re getting what you pay for. I thought I must be paying for something good,” said Marks, who is majoring in addiction studies.

Related: Struggling small colleges are joining the ‘sharing economy’ — teaming up to share courses and majors

None said they could understand the strategy behind colleges listing one price while charging most students a much lower one. When he was considering Colby-Sawyer, said junior Jeremy Reardon, a sports management major, the hockey coach “assured me, ‘You’re never going to pay close to that.’ ” Reardon shook his head. “It’s crazy.”

Other colleges and universities are also starting to make tuition more affordable, and their prices more transparent.

The University of Nebraska system froze tuition for the last two years. “We’ve got to think about how a young person coming out of high school thinks about college,” said Ted Carter, the system’s president. “At the end of the day, it’s cost.” More than half of freshmen now say they picked a college because of the price, according to an annual survey by an institute at UCLA.

Thaddeus Marks, a sophomore at Colby-Sawyer College. The higher price he saw when he first considered the college made him think “I must be paying for something good,” Marks says. Credit: Vanessa Leroy for The Hechinger Report

Colgate is expanding its financial aid to give all students from families with annual incomes of up to $175,000 institutional grants so they don’t have to take out loans. Since an earlier version of the plan began, the number of applications has more than doubled.

The university is “trying to make it something you can understand — ‘Is this institution in my range of what I can afford without mortgaging my house again or taking on a massive amount of debt?’ ” said L. Hazel Jack, vice president for communications.

Metropolitan State — where enrollment is down from more than 19,000 in 2017 to less than 16,000 this fall — has announced that it will hold tuition flat for students once they enroll.

“We were already pretty darned affordable. But people don’t know it,” Davidson said. “The narrative about higher ed right now is literally hysterical. I don’t mean that as in funny. I mean as in panicky. People think, ‘It has to be completely out of reach for me.’ So making a big splashy announcement is about getting the word out there, to get people’s attention.”

Related: One state offers lessons in how to cope with the college enrollment crisis

Students “stop and they start. We are betting — yes, from a business perspective — that this will encourage more of our students to stay in school as well as encourage more students who thought college was out of reach for them to start.”

Hope College in Michigan, too, is holding tuition steady for students once they are admitted, the first step toward a planned free-tuition model under which graduates will be encouraged to pay for their educations retroactively as a gift.

“It’s not just a question of do [prospective applicants] understand it or not,” President Matthew Scogin said. “A lot of them just can’t afford it.”

Jeremy Reardon, a junior at Colby-Sawyer College. When he was considering the school, the hockey coach “assured me, ‘You’re never going to pay close to that [advertised tuition cost].’ ” says Reardon. “It’s crazy.” Credit: Vanessa Leroy for The Hechinger Report

That’s far from a new observation. It’s been the conclusion not only of American families, but of high-level policy commissions for more than 30 years.

The cost of college “is not just a public relations problem, but a problem that frightens many citizens” a report by the State Higher Education Executive Officers warned in 1988. The federal Commission on the Future of Higher Education found in 2006 that Americans were already forgoing college because of the cost and demanded that efficiencies be found to make it more affordable.

Both warnings, with their implicit calls for reform, “were a few decades off,” Doyle noted wryly. “But we seem to have finally gotten to that point.”

Additional data analysis by Fazil Khan.

This story about college cost was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education.

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Jon Marcus writes and edits stories about, and helps plan coverage of, higher education. A former magazine editor, he has written for The Washington Post, The New York Times, The Boston Globe, Wired, Medium.com...

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