Students looking to graduate with a degree from a private higher education institution in the United States are in for a sweet deal.
According to a new report by the National Association of College and University Business Officers (Nacubo), private colleges are discounting their tuition revenue at the highest rates yet by offering grants, scholarships and fellowships.
These schools offer an estimated 49.1 percent institutional discount rate for first-time, full-time students in 2016-17, a rate the association says is the highest in the history of the survey. For every dollar a student pays in gross tuition revenue, the colleges and universities will use almost half for grant-based financial aid.
“That is great news for students and families. It means the chances of getting a grant to attend a private college are as high as they’ve ever been,” NACUBO’s director of research and policy analysis Ken Redd told Market Watch.
“But for institutions, we see some signs of financial stress.”
Private College Tuition Discounts Hit Historic Highs Again
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Nacubo surveyed 411 private, non-profit institutions for its 2016 Tuition Discounting Study“, which was released yesterday.
The average institutional discount rate among all students was found to be at a record-setting 44.2 percent. By comparison, the figure a decade ago was 34.3 percent, but that figure has steadily risen each year to culminate in today’s record rate.
Underlying these private colleges’ bargain prices is today’s stagnant economy and its effects on families’ ability to send their children to college, according to the Marketwatch article.
At the current high tuition rate, even upper-middle-income families are facing trouble affording fees that can go up to three times the cost of a tertiary education in an in-state public university.
But Redd said what these findings show is that these private, nonprofit institutions are putting in an effort to meet its students’ changing financial needs.
“There’s definitely a recognition families out there are struggling financially and schools are doing what they can to make college more affordable,” he said.
Getting the students they want
Another reason for the discounts is that schools are jostling for high school graduates, especially those who are very qualified or relatively wealthy, Stephen Burd, a senior policy analyst with the Education Policy Program told Marketwatch.
Smart students boost these schools’ rankings, while those from relatively well-off families bring in revenue for these private institutions. Although they receive financial aid, these students ultimately pay a relatively higher price.
“I don’t think this means they’re trying to do a better and better job of meeting the needs of their students,” Burd said.
“It means they’re trying to do a better job of recruiting the students they want to get.”