(Washington, D.C.) - Private institutions of higher education continue to significantly reduce tuition and fees for the majority of undergraduates who enroll, results of The 2014 NACUBO Tuition Discounting Study show.
Among the 411 private, nonprofit four-year colleges and universities surveyed, average discount rates for both first-time, full-time freshmen and all undergraduates reached all-time highs in the 2014-15 academic year. The average discount rate-defined as institutional grant dollars as a percentage of gross tuition and fee revenue-is estimated to have reached 48 percent for freshmen and 41.6 percent for all undergraduates, up from 46.4 percent and 39.8 percent, respectively, in 2013-14.
Schools also provided financial aid to a greater percentage of students for 2014-15 than in past years. Initial estimates show that approximately 89 percent of first-time, full-time freshmen at institutions surveyed received institutional grant aid, up slightly from 88 percent the previous year, and that aid is estimated to have covered 54.3 percent of tuition and fees, on average. Among all undergraduates, 77.1 percent received an institutional grant-up from 76.4 percent the year prior-which covered, on average, 48.9 percent of tuition and fees.
"The 2014 NACUBO Tuition Discounting Study provides more evidence that students and families should look beyond sticker prices when evaluating the right college for them," said NACUBO President and CEO John Walda. "As college affordability conversations continue, the study shows private colleges and universities are tackling the issue in part by increasing discount rates and providing more grant aid to more students."
Tuition discounting strategies have affected the bottom line at many colleges surveyed. With discount rates on the rise each year, growth in net tuition revenue has slowed significantly. Gross tuition price increases largely have been offset by increased grant aid to students, the data show.
And while tuition discounting is often used as a recruitment tool, enrollment at nearly half the colleges and universities surveyed decreased between 2013 and 2014. Chief business officers at those institutions were most likely to attribute the loss to price sensitivity. Among institutions where enrollments have increased, chief business officers most often cited improved recruitment and/or marketing strategies and increased institutional financial aid as the perceived reasons for growth.
For more on tuition discounting trends, enrollment strategies, and effects of endowments, please see the full 2014 NACUBO Tuition Discounting Study (available for purchase online). Please note that the 2014 statistics are based on preliminary estimates from NACUBO.
NACUBO, founded in 1962, is a nonprofit professional organization representing chief administrative and financial officers at more than 2,100 colleges and universities across the country. NACUBO's mission is to advance the economic viability, business practices and support for higher education institutions in fulfillment of their missions. For more information, visit www.nacubo.org.
About the NACUBO Tuition Discounting Study
Since 1994, the annual NACUBO Tuition Discounting Study has measured tuition discount rates and other indicators of institutional grant aid awards provided by four-year private, nonprofit (independent) colleges and universities to undergraduate students. While many public colleges and universities may also award institutional grants, the study has focused on independent institutions because they typically award the largest proportion of such aid.
Average Tuition Discount Rate: First-Time, Full-Time Freshmen and All Undergraduates
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