At last, as evidenced by more colleges and universities performing a tuition reset, higher education leaders are awakening to the threat of tuition discounting. The increasing rates by which many institutions have had to cut what they wish to charge students should be cause for public concern. On more than one campus, the overall discount rate has surpassed 50 percent on a sharp trajectory, compared to levels less than half that in recent memory.
The situation is alarming for two independent reasons. First, colleges and universities, even those proclaiming a commitment to diversity, are leaving behind disadvantaged students for their own rise in rankings. Second, they are imperiling their continued existence by reducing revenues to sums below sustainability. Even administrators and board members who are indifferent to accessibility should care about bankruptcy. Tuition discounting is like other bets against the future — heavily against the odds.
Tuition discounting has been around for some time. But it is being used for very different purposes than previously. Tuition discounting is the practice, on a significant scale, of advertising a list price for enrollment and offering deals that reduce that amount for select students. It is akin to other forms of differential pricing and dynamic pricing, responsive to supply and demand in the marketplace.
Related: Financial aid leveraging.