How Chief Business Officers View Discount Rates

Concern is greater at private than public colleges, but most aren’t expecting to bring the rates down.

July 31, 2017
 

Discount rates have the potential to divide admissions leaders and business officers at many colleges. To many in admissions, the ability to raise discount rates (or at least keep them level) is a key part of the strategy for building the class. And many fear that holding the line on aid packages can make it hard to meet targets for new students and new tuition revenue.

To business officers, of course, growing discount rates -- especially at private colleges -- create fears about shrinking net tuition revenue. The average first-time, full-time tuition discount rate edged even closer to 50 percent in 2016-17 as net tuition revenue and enrollment struggled.

The 2017 Inside Higher Ed Survey of College and University Business Officers included several questions about discount rates and found considerable concern about their increase among private college business leaders, but less concern in public higher education.

Chief Business Officers Who Say Their Discount Rates Are Unsustainable

  Public Private
% Strongly Agree Unsustainable 9% 29%
% Agree 14% 20%
% Neutral 30% 25%
% Disagree 31% 19%
% Strongly Disagree 16% 7%

If those numbers might make one expect some restraint on discount rates in the coming year, answers to another question suggest that chief business officers of private colleges may be more troubled about rising discount rates than convinced that they can be brought down.

Percentage of Business Officers Who Anticipate Bringing Down Discount Rates as Part of Budget Strategy

  Public Private
% Strongly Agree 2% 10%
% Agree 8% 22%
% Neutral 45% 28%
% Disagree 27% 26%
% Strongly Disagree 17% 15%

As the figures above show, private colleges' chief business officers are more likely than their public counterparts to want to bring discount rates down, but the percentage saying that are not equal to those who view their rates as unsustainable.

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