Higher Education

Colleges keep increasing discounts to keep students coming

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.

higheredgraphicThe 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.

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 see fewer discounts in future years.

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

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Jon Marcus

Jon Marcus, higher-education editor, has written about higher education for the Washington Post, USA Today, Time, the Boston Globe, Washington Monthly, is North America higher-education… See Archive