PALO ALTO, Calif. -- Responding to the uproar from students and parents over the skyrocketing cost of going to college, Stanford University is laying off employees and cutting its administrative budget this fall in an effort to put a lid on tuition and fees that are heading toward $25,000 a year.
The move, while bold and virtually unprecedented for an institution of Stanford's stature, carries substantial risks. The image of Stanford, home of two Nobel Prize winners named recently, has already begun to suffer because of a perception among some students that the university is somehow gutting itself with the budget ax.
Colleges and universities across the country are watching to see what happens to Stanford after taking this academic equivalent of a no-new-taxes pledge.
Many educators believe that Stanford is just the first big university to make such a move and that dwindling federal support and a variety of other economic factors will soon force others to follow.
"We needed a downward correction," said Donald Kennedy, Stanford's president and a former director of the U.S. Food and Drug Administration, who says he is responding to consumer anger.
The cost of going to Stanford this year -- tuition, fees, room and board, supplies and other expenses -- is $22,020, according to the College Board, a New York organization that tracks college costs. Costs at Harvard and most other top universities are about the same; if the price keeps increasing between 6 percent
and 10 percent annually as it has for the past 10 years, it soon will cost $25,000 a year at these schools.
Stanford is acknowledging that college costs cannot continue to spiral. Despite a $2 billion endowment and a $1.1 billion fund-raising drive, the university has cut $22 million from its budget and laid off 120 employees. At the same time, Stanford is vowing to keep tuition increases to within 1 percentage point of inflation, which was 4.6 percent in 1989.
Mr. Kennedy and his followers have a sense that they are one step ahead of a revolution.
"We had to change the way we do business," said James N. Rosse, Stanford's provost. "The old way was to figure out how much it was going to cost to run the university, then figure out how to raise the money. Now we say, 'Here's what we think we can charge for tuition, now figure out how to run the place within those limits.' "