(Source: Williams College)

Last week I reported that Princeton has decided not to raise tuition for the next academic year. (Room and board rates, however, will increase.) What are the implications for the rest of higher education?

Nothing, says one scholar (a former professor of mine at Harvard). Few universities are in the position to copy Princeton, given financial realities, and the likelihood of widespread tuition freezes remains slim.

Consider his opinion piece from InsideHigherEd.com:

For the second time in seven years, a highly visible and prestigious private institution has announced a decision not to increase tuition. In 2000, Williams College announced a tuition freeze for the coming academic year, and in 2007 Princeton University did the same. In both cases, the institutions cited substantial endowment gains as a central reason allowing them to hold tuition constant for one year. What are we to make of these episodic pricing decisions?

In the Williams case, I was familiar with the thinking of the leadership, and I believe it was a clear attempt to send a signal to peer institutions that price increases in the face of sharply increasing institutional wealth were undermining public trust in higher education. I wrote at the time that, "If peer institutions do not follow suit, Williams will almost surely be forced to resume tuition increases next year. And, within a couple of years, the entire incident will be forgotten." Indeed, that is precisely what happened.

I am not privy to the thinking that motivated the Princeton decision, but I do not sense from their public statements that they are trying to send market signals, or to lead others to emulate their behavior. In fact, the purity of their tuition decision was complicated by a 4.2 percent jump in room and board charges, so the net effect is to raise their total charges by $1,780, an increase greater than gains in the CPI. I see no reason not to take their public explanation at face value - they have experienced excellent endowment returns, and in 2006 their board authorized increased spending from the endowment.

With non-tuition revenue rising, they were able to meet anticipated financial needs for the coming year without an increase in tuition. They used this opportunity to bring expenses of room and board more closely in line with revenue, thereby reducing a subsidy they had been providing to room and board in recent years. In short, they took advantage of a favorable moment to (in their words) "'true-up' their operating budget."

While Princeton is larger and may carry more punch in the world of higher education than Williams, I will be very surprised if this decision triggers an onslaught of Emulation. Only a tiny number of extraordinarily wealthy institutions could even consider following, and it is unclear why they would do so. The distributional consequences of the Princeton decision could be viewed as analogous to the early Bush tax cuts, in that the benefits will accrue to the very wealthy parents who pay full tuition, not exactly a blow for greater equity. If a small number of similarly wealthy colleges and universities did the same thing, it is hard to work up much enthusiasm for the virtue of the resulting redistribution of income.

Read the rest here. Then ask yourself if he's right.