Sailing through the 'Perfect Storm': facing a storm of obstacles, private IHEs can prevail by keeping college affordable.

IN SEPTEMBER, U.S. REPS. JOHN BOEHNER (R-OHIO) AND HOWARD McKeon (R-California) introduced a bill that would financially punish colleges and universities that raise tuition faster than the rate of inflation. If institutions fail to comply within two years, they could be ineligible for many federal grants. Meanwhile, state financial support for public institutions is declining along with state revenues. Already at record enrollments and receiving more applications than ever, many of these institutions are unable financially to I accommodate additional students without significant reductions in quality. Record tuition increases are inevitable in order to balance budgets, while parents who are already financially strapped are wondering how much higher tuition can get.

Yet, bill or no bill, colleges and universities should proactively seek innovative ways to reduce the tuition burden for parents and students. Private colleges with smaller endowments, innovative programs, and solid capital campaigns are in a position to prosper while they find ways to ease the burden. These institutions have never relied on Large endowments or state income to support their budgets, and they are often in a position to implement innovations to keep college costs affordable. The following measures can be modeled by private IHEs to make them more attractive to cost-conscious parents and students:

Reducing the cost below today's tuition. In 1996, I founded a consortium to develop a national prepaid tuition program for private colleges and universities, to lower our tuitions below today's price. Nearly 300 colleges and universities joined the effort to create the plan, from Ivies such as Princeton (NJ) and research institutions such as Syracuse (MY), to smaller liberal arts colleges such as Pomona College (CA). Thanks to congressional action to allow private consortiums to offer a prepaid program, the Independent 529 prepaid tuition program began in September.

In the plan, the colleges take on all the investment risk and guarantee the cost up front. Each sets its own discount, based on the risk and the tuition increases it expects over time. For example, parents or grandparents of a newborn will be able to Lock in a freshman year at Juniata College at two-thirds of today's price. Member schools can market this as the only program in higher education that both Lowers and guarantees the future cost of tuition. We should let our prospective customers know that it's hard to find any other program in any industry that is comparable. State programs are struggling to keep up with increased state tuition rates.

Graduating in roar years. Aside from tuition increases, much of the recent increased college cost comes from extending the traditional four years of undergraduate education to five and beyond. Students, of course, must do their part. But at Juniata, we ensure that classes and advising are in place to make graduation attainable in four years. Seventy percent of our entering students graduate from Juniata in four years, compared to 28 percent at public institutions nationally. The initial reaction to this extraordinary difference is that, when compared to state institutions, students attending private colleges are wealthier, and fewer are minority students. The fact is that the percentages for wealth and diversity are virtually identical at state and private colleges in Pennsylvania and in most states across the country. Juniata students usually pay for only four years of undergraduate education and are in the workforce (or graduate school) much sooner than typical state school students. This has become critical in our conversations with prospective students and their parents. Schools can achieve this by giving students good advice and the right tools for getting a degree in four years.

Loons to parents. In order to help parents spread the cost at higher education over a longer period of time, Juniata initiated the JC PLUS plan. Loans of up to $20,000 are provided to parents at no interest during the time their son or daughter is at Juniata. Once the student graduates, the parents have up to 10 years to repay the loan, at an interest rate one percentage point less than the Federal rate. Other colleges have used similar deferrable Loan structures, including Dickinson and Lafayette colleges (PA).

We market the "Juniata advantage" through a two-tiered campaign that sells the value of a Juniata education by highlighting our major strengths and alumni successes. Within a week of sending the first financial award letter, we follow up with a targeted JC PLUS packet, addressing the questions parents are likely to have.

Recent studies of the millennial generation show that they are much more willing to look beyond the brand-name institutions. They are often disillusioned by budget-cutting turf battles, deteriorating facilities, program reductions, a higher likelihood of being rejected, and uncertain future tuition rates. Colleges with a slightly growing enrollment, new programs, new faculties, and a better admissions acceptance possibility can took quite good in comparison.

Marketing is key, even in these cash-strapped days. We need to be aggressive in boasting about our creative efforts to keep tuition down. Congressional challenges or no, schools that do this will almost certainly make the "A" list. They can fare much better than their larger, state-affiliated counterparts could have predicted just a few years ago, and outmaneuver this "perfect storm."