Tuition discounting reached record high levels at private colleges and universities in 2008, and the largest share of that aid was awarded without consideration of students’ financial need, according to a report released Tuesday by the National Association of College and University Business Officers (NACUBO).
The average discount rate for full-time freshmen increased from 39 percent in fall 2007 to 42 percent in fall 2008, and the average award covered more than half – 53.5 percent – of the “sticker price.” The discount rate represents the share of tuition and fee revenues colleges use to award institutionally funded aid.
Despite lamentations from some college presidents, tuition discounting has become an increasingly common practice at private institutions. Standard discounting involves placing the sticker price of attendance beyond the reach of many families, only to effectively slash that price by offering institutionally funded financial aid to many or, more typically, most students. Critics say it steers too much aid toward students without financial need, and it also forces high-tuition colleges to defend sticker prices students seldom actually pay.