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April 05, 2012 3:29 PM The Full Tuition Myth

By Daniel Luzer

More and more students are taking advantage of discounted tuition. This essentially refers to students paying a tuition rate that’s less than the advertised number that so dominates the higher education discussion.

According to a press release by the National Association of College and University Business Officers:

Data gathered from 400 private, nonprofit four-year colleges and universities participating in the 2011 NACUBO Tuition Discounting Study (TDS) indicate the tuition discount rate (defined as institutional grant dollars as a share of gross tuition and fee revenue) for first-time, full-time freshmen reached 42 percent in 2010 and is estimated to have reached 42.8 percent in 2011. The discount rate for all undergraduates rose from 36.4 percent to an estimated 37.2 percent in 2011.
The tuition discount rate has been on the rise since the recession began in late 2007. While the discount rate has risen, the portion of freshmen receiving an institutional grant declined slightly from a record high of nearly 87 percent in 2008 to 85.5 percent of freshmen in 2011. However, the average institutional grant as a percentage of tuition and fees has increased slightly from 48.5 in 2009 to 51 percent in 2011.

It often seems to students and parents as if there is a cost of higher education, and then there are scholarships to allow needy students to attend college. In fact, it doesn’t really work like that at all. Almost half of all college students pay a cheaper, discounted, rate to go to college.

In fact, what really happens is that most people pay a scholarship rate, which really a normal rate, and a few rich people pay the, much higher, special inflated price.

Given this, the idea of using tuition discounts to lure students to particular colleges may no longer be quite so effective a tactic for America’s admissions and financial aid departments.

The same organization indicated that the average grant to college freshman is now 51 percent of the official price. This is up slightly, from 49.8 percent, from last year.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer