Yeah, Stanford's pretty, I guess. But you'll be totally O.K. if you don't get in. (AP/Paul Sakuma)
Stanford University expects families earning less than $125,000 will not have to pay tuition in the coming year. (AP/Paul Sakuma)

Stanford University has received a lot of attention for offering free tuition to students whose families make less than $125,000 — throwing in free room and board for those earning less than $65,000.

But there is a trend that could have a larger impact on college pricing. Small- and medium-sized private universities have been slashing tuition for all students in an effort to reverse sliding enrollment numbers. And while these schools are not as prestigious as Stanford, their willingness to cut prices could signal a shift in the cost of higher education.

Nearly a dozen private colleges reduced tuition for the current academic year. Southern Virginia University, for instance, cut tuition and fees 23 percent from $18,900 to $14,600 a year, while Converse College in South Carolina brought down its prices by 43 percent to $16,500 a year.

Back when these schools announced their plans in 2013, they said the new prices were closer to what most students were actually paying after factoring in grants and scholarships. Still, they said they expected the reduction in price to save money for most families.

Lowering tuition is a risky strategy for schools because families often equate price with prestige. To maintain the perception of quality, private universities got in the habit of raising tuition but offering deep discounts through scholarships and grants. About 89 percent of the freshmen class of 2013-2014 received enough aid to cover half of their tuition at private universities, according to a study by the National Association of College and University Business Officers.

But that high-tuition, deep-discount model is falling flat for small private colleges. Schools are failing to fill seats, which is bringing in less money. A recent survey by Moody's Investor Service found that 45 percent of private universities were anticipating declines in enrollment and another quarter expected revenue from tuition to dip. The board of Sweet Briar, a women's liberal arts college in Lynchburg, Va., recently voted to close the school because of severe budget shortfalls.

These smaller schools are under more pressure largely because they don't have the huge endowments of places like Harvard and Stanford. Those gold-plated schools enroll an outsize proportion of wealthy students and sit on multi-billion-dollar endowments that make it a lot easier to let some students forego tuition payments. (Stanford students will have to pay $5,000 each year, even if they qualify for the tuition benefit.)

Stanford has an endowment of $21 billion, compared to the median private college endowment of $26.2 million. The economic crisis pummeled the endowments of most colleges and universities, with many suffering 25 percent declines in value, according to an analysis of data from the National Association of College and University Business Officers. Many schools have not fully recovered.

There's no guarantee that lower costs will attract more students, and cutting prices won't solve the problem of rising costs. But the status quo doesn't appear sustainable. Families have grown sensitive to price increases in this uneven economic recovery. Tuition has risen faster than inflation at a time when wages have remained flat. If the schools that have cut prices start to see a few years of enrollment growth, more universities could get on board.