Tuition discount rate reaches new high at private colleges

As competition for students increases nationwide, private colleges and universities are offering incoming freshmen sharp discounts on tuition and fees, according to the annual Tuition Discounting Study by the National Association of College and University Business Officers (NACUBO). The average tuition discount rate—“institutional grant dollars as a percentage of a college’s gross tuition and fee revenue”—cracked 50 percent in 2017-18 for first-time freshmen and is expected to reach 52 percent for the 2018-19 academic year, a record high.

NACUBO’s study, which included 405 private, nonprofit colleges and universities, shows the continuation of a decade-long upward trend in discounting, according to The Chronicle of Higher Education. Since the 2008-09 academic year, the average grant received by freshmen has increased by 91 percent, from $10,586 to $20,255. College sticker prices, meanwhile, climbed by 47 percent.

The report “shows that colleges are really trying to provide financial aid for their students,” Ken Redd NACUBO’s senior director of research and policy analysis, told Inside Higher Ed. However, the results also “indicate that institutions may be finding efficiencies and ways to manage with less tuition revenue,” said Matthew Hamill, the organization’s senior vice president of advocacy, communications, and research.


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Redd, in a statement, called out another key takeaway: “Understanding the concept of ‘net price’ is more important now than ever.” That sentiment was echoed in a Baltimore Sun column penned by first-generation college student Sagar Chapagain. “Too many low-income students are still deceived by the optical illusion of college cost and lack the guidance that could help them see these barriers as surmountable,” he writes.

Chapagain—who started his undergraduate studies at community college, transferred to Cornell with the help of need-based aid, and will be starting medical school this fall—calls on college and universities to “take into account not just the real challenges, but also the perceived obstacles facing low-income, first-generation students.” Clarifying financial aid concepts, communicating proactively with parents, and offering accessible net price calculators are several ways Chapagain suggests increasing students’ access to top institutions.

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