Press Releases

Tuition Discounting, Not Just a Private College Practice

09/11/06

The College Board has published Tuition Discounting, Not Just a Private College Practice, a paper authored by Sandy Baum, senior policy analyst at the College Board and professor of economics at Skidmore College, and Lucie Lapovsky, education consultant and former president of Mercy College. Most of the discussion of tuition discounting has focused on private colleges, but this new study documents trends in need-based and non-need-based aid in public two- and four-year institutions, in addition to private colleges and universities.

Among the findings:

• In 2003-04, an average of more than 12 percent of the tuition revenues were discounted back to students at public two-year institutions and the average discount rate was more than 15 percent at public four-year institutions. At private four-year institutions it was 32 percent.
• More than 65 percent of the institutional grant aid at public two-year and private four-year colleges goes to support the documented financial need of students, while only 40 percent of the institutional grant aid meets students' need at public four-year institutions.
• Discount rates tend to be higher at smaller public four-year institutions and at public institutions with larger out-of-state student populations.
• The discount rate at public flagship institutions averaged 19 percent in 2003-04. Only 44 percent of this aid was given to students with documented financial need.
• The discount rate at private four-year institutions has been increasing slowly but steadily since 1994-95, while at public two-year and four-year institutions, the discount rates peaked in 2002-03.

Significant amounts of institutional aid in the public sector are being distributed to students based on criteria other than need; a high proportion of these dollars are allocated to students whose financial circumstances would permit them to enroll without subsidies.

For more information, please contact the Public Affairs office at 212 713-8052.