- Colleges and universities continue to offer increased rates of tuition discounting for students at school, despite the fact that tuition revenue is not quite as strong and enrollment in higher ed institutions is struggling, according to the 2016 Tuition Discounting Study from the National Association of College and University Business Officers.
- Inside Higher Ed analyzed the report, which indicated the average tuition discount rate for first-time, full-time students was 49.1% in 2016-2017, a 1.1% increase from the prior year — and the discount rose from 43% to 44.2% for undergraduates.
- According to the report, the continued discount hikes come from efforts to meet the needs of students and families continuing to require aid to attend increasingly more expensive institutions, and colleges and universities must also be more competitive to attract students, as enrollment is dropping and trends point toward lower numbers of high school graduates.
Colleges and universities are taking an approach to attracting students with tuition discounting that may not be sustainable in the long term. In a way, each problem is feeding the other. The lower number of college enrollees and missed enrollment targets at universities causes a need to hike tuition to continue to pay expenses, but the hikes put colleges and universities further out of reach of the limited number of students, and the schools then undercut themselves with discounts. Colleges and universities need to consider alternative revenue streams if fundraising and four-year undergraduate tuition no longer suffices.
One potential alternative source could be classes, tutorials and bootcamps that could be offered at a lower rate but might reach a new, previously untapped audience for higher ed institutions. Many colleges often open their classes to students or individuals not enrolled as full-time students, but colleges and universities should be more proactive about advertising their services to those beyond the four walls of the campus. Elite, selective colleges are particularly skittish about permeating the wall between full-time students and class-by-class enrollees, but it could be a new form of revenue that would not cost much more in expense. Simply shopping four-year degrees seems that it will not manage the revenue gap alone.