Deciphering B-Jargon

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College Costs Rise

The inflation gauge used by higher education officials to track the costs of running a university increased by 3.4% in the 2007 fiscal year, a harbinger that college tuition could rise slightly this year. The increase in the the Higher Education Price Index (HEPI), compiled by Research Associates of Washington, D.C., is lower than a year earlier, when the index rose 5%.

Sandy Baum, senior policy analyst at the College Board, which tracks tuition data, said it's "reasonable" to think that if HEPI rises, tuition might follow suit. The College Board will release a study on 2007 tuition in October. In the 2006 fiscal year, tuition rose about 6% in public and private four-year colleges, while the HEPI rose 5%.

"In general, it is certainly true that if the Higher Education Price Index goes up more rapidly, it will mean upward pressure on tuition," Baum said. "However, it is not a one-to-one correlation.… A lot of other things not reflected in the price index could also put upward pressure on tuition."

In 2007, the cost index showed that faculty salaries increased by 3.8%, higher than last year's rise of 3.1%, while fringe benefits jumped 5%, the same as last year. The cost of supplies and materials rose 6.8%, the sharpest increase of the eight categories making up the index.

The HEPI always rises at a faster rate than the consumer price index because salaries and compensation at colleges tends to go up faster over time than average prices in the economy, Baum said.

Between the 2001 and 2007 fiscal years, the HEPI went up 22%, while the consumer price index rose 14%, according to College Board statistics. While the index accounts for items like salary, compensation, and utilities, it does not factor in costly expenses like investment in technology and new buildings.

Yale Wins CNBC Contest

The winner of CNBC's Fast Money MBA Challenge is the Yale School of Management. The Aug. 22 episode, which aired live from the NASDAQ MarketSite in New York's Times Square, pitted students from Yale against a team from the University of Texas at Austin's McCombs School of Business.

It was the final of seven games that were played out over four episodes. The business trivia show tested students' knowledge of ticker symbols and financial trivia and was modeled after the 1960s-era GE College Bowl.

Students from Columbia, Dartmouth, MIT's Sloan School, NYU, UCLA, University of Chicago also participated.

The Yale team will split a $200,000 prize, which can be used for school-related expenses.

Damast is a reporter for BusinessWeek.com.