Who benefits when colleges cut their sticker prices?

As a growing number of private colleges slash tuition prices in hopes of increasing transparency and attracting more students, some observers are cautioning that the changes are more about marketing than affordability. According to the National Association of Independent Colleges and Universities, at least 23 private institutions have cut tuition since 2016. In announcing their decisions to decrease tuition, colleges have said that potential applicants often feel discouraged or deterred by the sticker prices for tuition, fees, and room and board, without realizing how much access they have to financial aid.

The number of students paying full price to attend college is relatively low. According to an analysis conducted by The Washington Post, in 2016-17 there were more than 300 colleges and universities where at least 95 percent of their undergraduate population took advantage of scholarships and grants.

The true impact of tuition cuts? Price transparency.

Noting that the average tuition discount rate at private colleges is 50 percent, Jeff Selingo, a contributing editor at The Atlantic, says tuition reductions primarily impact those who can afford to pay full price for college. “So it’s mostly helping higher-income students who, in many cases, might be paying more of the full sticker price,” Selingo told WBUR. “It’s not necessarily helping affordability.”

Another journalist pointed out that price cuts are about providing “transparency in pricing” more than anything else, estimating that just 10 percent of students pay sticker price at private colleges. “Most colleges, by cutting their tuition even significantly, they’re not necessarily changing their revenue or their yield per student,” NPR education correspondent Anya Kamenetz told WBUR. “In fact, it may be going up because they may change the types of students they attract.”

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