When Jonathan Korr applied for college, he figured there was a 50/50 chance that Cornell University would accept him. In high school, Korr earned a 3.6 GPA and 1400 on the SAT and ranked in the top third of his graduating class. 'My GPA wasn't the best compared to other applicants. But, in my Cornell credits, I had almost a 4.0,' says Korr, who had spent two summers at the Ivy League institution and took college courses while in high school. He also served as student government vice president, a Congressional adviser to a New Jersey representative (advocating for young people's interests) and a hospital volunteer. His college entrance essay eloquently tied his interest in history with his family background.

Korr got lucky. He was accepted into Cornell, but high school students who earn top grades and participate in extracurricular activities can no longer expect automatic entrance to an Ivy League university; they're often beaten by students with other credentials. The nation's top colleges are facing stiff competition, too, as they vie for the smartest, most talented and most diverse classes. To attract top students, schools must offer comprehensive packages ' scholarships, top-notch professors, state-of-the-art technology and beautiful buildings. In this march to self-improvement, colleges insist they must raise tuition while continuing to solicit alumni donations to pay for it. Meanwhile, tuition continues to soar.

'Schools want to be as good as they can,' says Ronald G. Ehrenberg, author of the book Tuition Rising: Why College Costs So Much and director of Cornell University's Higher Education Research Institute. 'They want better faculty, better research programs, smaller class sizes and better students.' And guess who's paying for it? You.

Roping students in
Today, an education at a private university can run more than $40,000 a year for tuition, room and board, meals and other expenses. Most colleges, even those with billion-dollar endowments (donations given to a school for a specific purpose) have annual tuition increases higher than the inflation rate. On average, tuition has risen 2.5 to 3.5 percent above inflation, Ehrenberg says.

Many students and parents criticize schools for upping tuition each year. Some campuses have seen protests over double-digit public school in-creases and smaller, but still significant, hikes at private schools. Ann Wright, a higher education expert at Rice University, says that university spending has nothing to do with the consumer price index. 'It is more dependent on expensive things: professor salaries, large volumes of medical insurance, technology, as well as keeping up with the competition,' says Wright, also chair of the U.S. News & World Report College Advisory Board.

Harding University, a Christian school in Arkansas that charges about $10,000 annually, tries to tie tuition hikes to inflation. This year, the increase was 3.4 percent and the consumer price index was 3.3 percent, says Mel Sansom, chief financial officer. 'We have been very fortunate with decreasing our debt over the last two or three years,' he says. The university paid off debt by selling property (which many other universities keep acquiring while incurring more debt) and refinancing.

Each year, universities assemble multi-million dollar operating budgets that cover faculty and staff pay, building maintenance and construction, academic purchases and technology. Depending on the health of its endowment, a school can rely on it to cover significant expenses. Tuition increases are especially likely at universities whose endowments are lacking … yet these increases often go hand-in-hand with schools that have some of the top endowments. They justify the need to raise tuition in the name of remaining competitive and maintaining their top academic ratings. What's more, high-priced prestigious schools, says Ehrenberg, lead to acceptance at good grad schools and higher income in the job market.

Some students believe that the more money they spend, the better the education. 'It tends to be true,' says Aditi Surie, a junior at Wesleyan University, a premier liberal arts college that has the eighth highest tuition in the country. 'There are plenty of schools that are ridiculously expensive, have horrible facilities and low standards.'

Washington University in St. Louis is ranked as the nation's 11th best school by U.S. News & World Report, surpassing Brown and Cornell. To remain on top and popular, the university is undergoing library and housing renovations, increasing undergraduate research and, as always, upping faculty pay, says Barbara A. Feiner, who heads the financial office.
However, it's coming at a price ' $41,854, a 4.6 percent increase over last year. 'When determining the budget and tuition increases, we look at the universities with which we compare ourselves. We don't want to get out of the middle of that range,' Feiner says. 'We consider family income, but our concern is budgets for our eight schools. And the largest source (60 percent) is tuition.'

Bowdoin University's endowment was almost $515 million, as of June 2004, according to The Chronicle of Higher Education. The school's endowment is the 96th highest, prompting the university to embark on a five-year capital campaign. The university depends on tuition for half of its operating budget of $100 million, says Scott Hood, vice president for communications.

At Bowdoin, faculty and staff pay is always a priority. In 2004-05, the average professor earned $108,500 ' $30,000 more than other baccalaureate institutions. 'Our mission is close student-faculty interaction,' Hood says. 'It's not the kind of place that has famous faculty.'

At Yale University, professors' names are certainly recognizable. Full-time faculty members earned $145,600 annually in 2004-5, according to The Chronicle. 'Yale wants to provide a certain level of education, in the classroom and in extracurricular opportunities,' says Tom Conroy, Yale's deputy director for public affairs. 'What drives a budget every year, and tuition increases, are the costs for providing these things ' for example, the cost of recruiting and obtaining top professors. And the physical plan.'

To offset Yale's $41,000 total cost, close to 40 percent of students receive financial aid, and the institution guarantees that all students who demonstrate need will have their entire packages met. 'Yale is a need-blind institution,' Conroy says. The school, like other top institutions, does not offer merit, athletic or other types of talent-based scholarships ' only funding for those who show need. Starting this year, students whose families earn under $45,000 a year don't have to pay to attend Yale.

Yale can guarantee need-based aid because of its hefty endowment of $12.7 billion, Conroy says. About 30 percent of Yale's annual funding comes from the endowment. However, Yale students still see tuition increases each year, even though the endowment is the nation's second highest. 'Yale has been here for 300 years and plans to be here forever,' says Conroy, explaining why more endowment isn't used each year.

But students who attend Yale ' and do not qualify for financial aid because their parents technically earn enough to pay for college but who really can't afford to pay outright ' are out of luck. 'There's no requirement on Yale's part to help anyone with a loan,' Conroy says.

Muhlenberg College doesn