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Tuition Discount Rates Reach New Record Level in 2015-16

May 16, 2016

The latest edition of NACUBO’s study on tuition discounting shows private colleges and universities continue to offer substantial discounts to the students they enroll.

The NACUBO Tuition Discounting Study (TDS) measures the institutional tuition discount rates and other indicators of institutional grant awards to undergraduates who attend private nonprofit higher education institutions in the United States. Results of the 2015 TDS are based on survey responses from 401 independent colleges and universities that were members of NACUBO as of September 2015. The latest survey collected final institutional grant awards and other data for academic year 2014-15, as of the fall of 2014, and preliminary estimates for 2015-16, as of fall 2015.

The most recent survey results show that the average institutional tuition discount rate—defined as total institutional grant dollars awarded to undergraduates as a percentage of gross tuition and fee revenue—continues to rise. The average institutional discount rate for first-time, full-time freshmen reached 47.1 percent in 2014-15, and preliminary estimates indicate that the rate rose to 48.6 percent in 2015-16—the highest level recorded in the 29-year history of the TDS project. The estimated institutional discount rate for all undergraduates in 2015-16 rose to 42.5 percent, also an all-time high.

The rising discount rate for all undergraduates means that for each dollar of tuition revenue private nonprofit colleges collected from all undergraduates in 2015-16, they returned about 42 cents to students in the form of institutional grant awards.  

More Grant Recipients, Lower Growth in Net Tuition Revenue

Institutional discount rates have risen, in part, because a greater share of students have received institutional grant awards, and the average grant award covers a larger share of the average tuition price. About 88 percent of first-time, full-time freshmen received institutional grants in 2014-15 and 2015-16, up from 85.7 percent in 2010-11. The average grant award in 2015-16 covered about 55.5 percent of tuition and fees, up from 53.9 percent in 2014-15.

Rising discount rates have led to much slower growth in net tuition revenue. The average growth in net tuition revenue per first-time, full-time freshman is expected to be just 1.2 percent in 2015-16, compared with a rise of 2.1 percent a year earlier.

A press release and a podcast episode with more details of the study results are available, and a final report with study results may be purchased from the NACUBO Online Bookstore. 


Ken Redd
Director, Research and Policy Analysis