Research

Tuition Discount Rates at Private Colleges Increase, Providing More Aid for Students

Students at private colleges paid less than sticker price this year, while institutions faced acute consequences, reported NACUBO.

• By Sri Ravipati
• 05/16/16

Private colleges reached an all-time high in tuition discount rates and experienced setbacks in revenue all in the same year, according to the latest data from the National Association of College and University Business Officers (NACUBO).

The 2015 NACUBO Tuition Discounting Study surveyed 401 private, nonprofit colleges and reported that these institutions saw yet another increase in tuition discount rates, or the percentage of tuition and fee revenue institutions give back to students as grant-based financial aid.

For the 2015-2016 academic year, the average tuition discount rate was an estimated 48.6 percent for first-time, full-time freshmen, up from 47.1 percent the previous year. For all undergraduates, the rate was 42.5 percent, up from 41.3 percent the previous year. “In other words, these private colleges put approximately 42 cents on every dollar of tuition and fee revenue toward scholarship and grants,” according to a news release.

As a result, students received the most aid this year, with 88 percent of first-time, full-time freshmen and 77.6 percent of all undergraduates at private colleges receiving financial aid. Institutions with more than $1 billion in endowments funded close to one-third of scholarships with their endowment dollars and used 85.5 percent of the grants to meet need. Meanwhile, institutions with endowments less than $25 million funded 7 percent of scholarships with their endowments and 76.7 percent of scholarships met need.

The report also reveals that institutions faced slight financial setbacks as a result of discounting tuition, with net revenue down from 2.2 percent last year to 1.8 percent. Approximately 37.5 percent of institutions also reported declining enrollment in first-year students and total student body.

The full report is available for purchase on the NACUBO site.