Often it seems that academic administrators (among many other groups) are adamant that demand curves are not downward sloping or, at the very least, the price elasticity of demand is very small. Yet, it seems this is not true:

So starting this year it is trying something different to lure applicants: participating in a regional program resulting in lower tuition for students from Washington, Oregon, Montana and a dozen other Western states.

More in this interesting article. Another graph I found interesting:

University officials acknowledge that their use of pricing to attract out-of-state students is a break from the past. “This is a very unique philosophical shift,” said Don Betz, chancellor of the University of Wisconsin-River Falls.

The "unique philosophical shift" is only for a certain group of people. Raising tuition rates seems to be a knee-jerk reaction to a threatened or actual decline in university-wide revenues. However, every principles of microeconomics textbook provides a chapter on price elasticity of demand which explains that if price elasticity is greater than one in absolute value, raising price will reduce total revenues.

Whether the price elasticity of demand for smaller regional schools has been changing over time or if it is only now being recognized or intuited as being relatively high is an interesting question.