Enrollment at more than 40 percent of private colleges and universities declined last year, forcing the institutions to offer steep tuition discounts to fill seats.
Even with that, colleges began the academic year with a record number of spots still available, according to the non-partisan, non-profit education news organization, The Hechinger Report.
Hechinger education reporter Jon Marcus says the decline is partly because of demography - the number of students graduating from high school peaked in 2009 - but the more important factor is parents and potential students balking at high tuition rates and becoming more unwilling to take on debt.
As one admissions official told Marcus, "we've reached a tipping point - the cost of college is really beginning to alarm families."
The crisis is also affecting public institutions.
States have cut the amount they spend on higher education by more than 10 percent in the last two years, bringing spending down to 25 year lows. The cost of attending community college has risen by almost 10 percent in the last year.
The development comes as public officials, including President Barack Obama, are trying to increase the number of Americans with post-secondary education.
Selected articles by Jon Marcus:
Is the college bubble finally bursting? Have tuition costs deterred you or someone you know from going to a private college/university? Let us know on our Facebook page.
- Jon Marcus, reporter with the education news service The Hechinger Report.
This segment aired on January 15, 2013.