Contrary to conventional wisdom--as expressed in a recent Time magazine cover story, among may other venues--a new study shows that colleges like Colby should become more desirable and competitive in coming years even as tuition and fees rise. And, the study suggests, one of the best ways to ensure Colby's position as a top-drawer college is to build its financial aid endowment--a principal goal of The Campaign For Colby. A paper by Gordon C. Winston, co-director of the Williams College Project on the Economics of Higher Education, uses classic models of supply and demand to make predictions about the future of elite colleges. As the pool of college-bound students increases, the study says, the supply of talented students will increase proportionately, and those who are most talented will gravitate even more strongly toward colleges that enroll the best. "The quality of teaching and the quality of the student body are the two most important ingredients in the educational process," said Herbert E. Wadsworth Professor of Economics James Meehan Jr., who has been following the Williams project and its fallout. The desire to attract top students, Meehan says, is one reason why colleges and universities typically charge much less than the actual cost of a student's education. "Charging below what the market would bear creates excess demand," Meehan said. "The applicant pool is larger, so colleges can be more selective." Financial aid is critical because it means Colby can keep accepting very good students who are "more sensitive to price than others," Meehan said. If Colby admitted only those who don't need financial help, the quality of the student body would be reduced--and, therefore, fewer good students would want to attend in the future. What's more, Meehan says, colleges need the extra funding that endowments provide because it allows them to hire top-quality faculty and offer amenities like up-to-date residence halls, access to computers and first-rate athletics facilities. "If you charge a lower price compared to your competitors," he said, "the upside is that a student may say, `I'll go to Colby instead of Williams.' But if you cut your price and the size of the student body remains the same, charging less means you have to scrimp on amenities. And in that case, students may not want to come even if you do charge less." Recent good news on the financial aid front includes a "super scholarship" gift and nine pledges of an average of $140,000 each to unrestricted scholarships and endowed scholarships. The Campaign For Colby objective is to secure 100 fully endowed scholarships (a total of $30 million). "A Colby degree, if it follows the average of other good small liberal arts colleges, increases the recipient's lifetime income by about seventy three percent over what one would earn without such an education," said Randy Helm, Colby's vice president for development and alumni relations. "That translates into a substantial increase in tax revenue from those individuals for society over a lifetime, which benefits everybody."