Dive Brief:
- Private colleges and universities have continued to increase the discounts on stated tuition and fees for undergraduates — especially first-time, full-time freshmen — according to a new report from the National Association of College and University Business Officers.
- The average tuition discount rate for these freshmen, defined as institutional grant dollars as a percentage of gross tuition and fee revenue, was up to 48% in 2014 at private institutions from 46.5% the year before.
- Inside Higher Ed reports that the discounting is unsustainable as colleges and universities struggle with decreasing enrollments and respond to students’ price sensitivity with steeper discounts.
Dive Insight:
The latest data from NACUBO indicates that private higher education institutions, on average, gave 48 cents of every dollar collected in tuition and fee revenue back to freshmen in the form of grants to discount their sticker price. Increasing competition is forcing institutions to offer more generous financial aid packages to appear attractive, and in some areas of the country, changing demographics mean a smaller pool of students to fight over. The trend lines are clear, however, and the financial health of colleges and universities may depend on breaking out of the mold.