College Guide

from the Hechinger Report

July 02, 2014 10:02 AM Colleges Keep Increasing Discounts to Keep Students Coming

By Jon Marcus

Colleges and universities continue to give record-high discounts on tuition, which is good news for students, but bad news for the institutions, a new report shows.

The so-called discount rate—the amount of revenue that goes back out the door in the form of financial aid to fill seats—was projected to have grown to more than 46 percent at colleges and universities this past academic year, according to the report, from the National Association of College and University Business Officers.

That’s the highest ever, up from just under 45 percent the year before.

The organization blamed flat enrollment driving greater competition for students.

This trend means that, even as they raise their advertised prices faster than the rate of inflation, many colleges and universities are giving discounts so steep that they’re falling behind.

Even as they raise their advertised prices faster than the rate of inflation, many colleges and universities are giving discounts so steep that they’re falling behind.

Overall revenue from tuition between 2012 and 2013 actually fell by one-half of 1 percent, the report said.

Despite this, nearly one in five colleges saw declines of at least 10 percent in the number of entering freshmen between 2012 and 2013, which the report blamed on increasing price sensitivity. Nearly half of all universities and colleges suffered declines in total undergraduate enrollment.

Students could fewer discounts in future years.

The report said nearly a third are holding the line on giving further price breaks.

[Cross-posted at the Hechinger Report]

Jon Marcus is a higher education editor at the Hechinger Report, a nonprofit, nonpartisan education news outlet based at Teachers College, Columbia University.

Comments

(You may use HTML tags for style)

comments powered by Disqus