Price of admission: Belmont Abbey and Peace cut tuition to attract students. Will other private colleges follow?

• Author: Saffron, Jesse
• Position: Statewide: BUSINESS NEWS FROM ACROSS NORTH CAROLINA

The Benedictine monks who founded Belmont Abbey College 138 years ago are better known for peacefulness than for trend-setting. But the Gaston County campus is the scene of a bold experiment watched by other private liberal-arts colleges in North Carolina. Belmont Abbey cut its annual tuition and required fees by a third in 2013 to $18,500 and didn't raise the price this year, putting the college well below the $25,000 to $33,000 a year that many of its peers charge. William Peace University in Raleigh cut its tuition by nearly $2,000, to $23,700, in 2012. So far no other private or public university in the state has made a similar decision. Tuition at North Carolina's public colleges is much lower, ranging from about $4,500 per year at Elizabeth City State University to $8,100 at N.C. State and UNC Chapel Hill. Belmont Abbey wants to make the school more accessible to students from low- and middle-income families and to narrow its academic focus, President William Thierfelder says. Along with the tuition cuts, Belmont Abbey eliminated 16 of 85 administrative employees in April, cutting $1 million from its $26 million annual budget. The lower costs should help push enrollment from almost 900 traditional students this year to 1,000 over the next few years, college spokesman Rolando Rivas says. (The school offers a separate program for older adults.) Belmont Abbey didn't act out of desperation, Rivas says. Enrollment has remained steady as the school renovated its student center and added two new residence halls, a dining area and a fitness center over the last three years. But Belmont Abbey's finances aren't flush, with an endowment of about $11.9 million.

Similarly sized Catawba College in Salisbury has a $53.3 million fund, while Raleigh-based Meredith College has $93 million. Thierfelder wants donations to be directed toward Belmont Abbey's endowment and special projects rather than for operating expenses--most donors prefer to give for a building than to pay the electric bill.

Tuition-revenue growth has declined at virtually all colleges, public and private, according to a November report by Moody's Investors Service Inc., the New York-based ratings agency, which downgraded credit ratings of 36 U.S. private colleges and issued a negative forecast for the entire sector in 2013. "What we're concerned about is the death spiral--this continuing downward momentum for some institutions. We will see more closures than in the past," Moody's...