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Newly Released NACUBO Tuition Discounting Survey Report Shows Rates Remain Stable

May 8, 2009

Results from the 2007 NACUBO Tuition Discounting Survey show that the average tuition discount rate for first-time, full-time freshmen in fall 2007 was 39.1 percent. The survey results are based on responses from 253 four-year private, non-profit (independent) colleges and universities. This rate is not significantly different from the 37.8 percent discount rate reported in the 1998 study, which was based on 367 institutions.

NACUBO’s Tuition Discounting Survey measures tuition discount rates for full-time freshmen and all undergraduates. Under tuition discounting plans, colleges and universities use a portion of their tuition and fee revenue to provide students with institutional grants based on students’ demonstrated financial need, academic merit, or other criteria. In the 1990s and early 2000s, discount rates increased rapidly. From fall 1990 to 2002, the average tuition discount rate at four-year independent institutions increased from 26.7 percent to 39.4 percent, and the share of first-time, full-time freshmen who received an institutional grant award grew from about 62 percent to 81 percent. Since then, awarding of institutional grants appears to have become more moderate. In 2007, an average of 81.7 percent of freshmen attending surveyed institutions received some kind of institutional grant. For students who received these grants, the reported average award covered 49.2 percent of the average fall 2007 tuition and fees listed prices.

For purposes of analysis, the study assigns institutions to one of three categories in terms of size (less or more than 850 first-time, full-time freshmen) and tuition and fee sticker price (less or more than $25,000). Of the 253 institution respondents in 2007, 118 are categorized as Small College/Lower Tuition (SCLT), 88 are categorized as Small Colleges/Higher Tuition, and 47 are categorized as Large Colleges and Universities (LCU).

Institutions within the SCLT category had the highest average discount rate in 2007 (41.7 percent), slightly more than the SCHT category (39.2 percent). Both low-tuition and high-tuition small colleges had higher average discount rates than large institutions in the LCU category (32.5 percent). On average, LCU institutions had the lowest share of freshmen receiving grants, but their grants to freshmen covered a larger share of tuition and fees than grants at small lower-priced institutions (50.9 percent at LCU institutions compared with 45.9 percent at SCLT institutions).

Further variation in 2007 tuition discount rates is evinced by other characteristics, such as region and Carnegie classification. Independent institutions located in the Plains region (which includes the states of Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota) had the highest discount rate (45.8 percent), followed closely by a discount rate of 42.3 percent for institutions located in the Southeast (which includes the states of Arizona, New Mexico, Oklahoma, and Texas) and a discount rate of 41.8 percent for institutions located in the Rocky Mountain region (which includes the states of Colorado, Idaho, Montana, Utah, and Wyoming). The average discount rate by Carnegie classification is lowest for doctoral/research universities (33.7 percent) and highest for medium and small sized master’s institutions (41.7 percent).

For more information about the Tuition Discounting Survey report, go to

http://www.nacubo.org/Research/NACUBO_Tuition_Discounting_Study.html

Survey participants receive complimentary access to the survey report materials.

NACUBO staff resource is Santiago Merea.


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