Cut Too Deep? Tuition Discounting at a Crossroads | A Special Report from Inside Higher Ed

 

Cut Too Deep? Tuition Discounting at a Crossroads

September 23, 2019

At a Glance

For years, college administrators and board members have closely monitored tuition discount rates at their institutions. But they haven't always been comfortable with high and often-rising discount rates. Nor have they always had easy access to important context explaining why colleges and universities discount the way they do.

These issues are likely to come to a head in today's rapidly changing higher education market. For all the attention tuition discounting receives from campus leaders and higher education experts, many report the practice causes consternation, misunderstanding and reflexive apprehension. Even those who historically have extolled discounting's benefits worry that ever-rising discount rates are starting to squeeze margins, diminish returns and bankrupt institutions. This question is being asked with increasing frequency: How long can sticker prices and discount rates keep climbing before the model reaches its breaking point?

Discount rates affect institutions of various sizes, market positions and wealth levels in different ways. In order to successfully navigate the future, all leaders at a college or university, from enrollment manager to board member, will need a nuanced view of discount rates and the trends affecting them. This special report seeks to explore those trends and recent developments in discounting. It will review different strategies campuses are deploying as they seek to bolster their budgets and will suggest possible best practices institutions can follow.

By exploring key concepts and developments in discounting, leaders can better evaluate their own institutions to prepare a course of action for a smaller-margin future that for many will require smarter pricing and better management.

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Topics Include

  • How declining enrollment, demographic changes and changes in the economy have impacted tuition discounting in recent years and will continue to do so in the future. 
  • A deep dive into both public and private institution’s discounting practices. 
  • Case studies highlighting institutions that have experimented with strategies including tuition discounting, guaranteeing tuition and resetting tuition. 
  • Concerns higher ed leaders and experts have about discounting, including public relations and perceptions, enrollment, access and equity. 
  • Best practices and guiding principles from experts to help leaders prepare their institutions financially and otherwise for the future.

 

Table of Contents

Executive Summary

Introduction: Context Counts

Covering the Basics

Important Terms

By the Numbers

The Environment

Why Discount?

Who Discounts

Drawing Lines on Definitions

       Snapshot: Graduate and Professional Schools

       Snapshot: Creating a Tuition Price Auction

Diving Deep Into Private Institutions’ Discounting Practices

       Snapshot: 60 and 70 Percent Discount Rates

Perspectives on Public and Private Discounting

Need Versus Merit

       Snapshot: Freezing and Fixing Tuition

       Snapshot: Price Matches

       Snapshot: Resetting Tuition

Critics Abound

A Breaking Point?

       Snapshot: Playing Rough

Best Practices

       Snapshot: Modeling

Conclusion: A Buyer’s Market and a Mature Industry

Further Reading

Quoted Sources

About the Author

 

This report was made possible in part by the financial support of Transact.

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About the Author: Rick Seltzer, senior reporter, covers business and management for Inside Higher Ed. He joined the publication in 2016 after working as a money and general-assignment reporter for The Baltimore Business Journal. Previously, he was a business reporter for The Bloomington Herald-Times, and he covered small business and health care for the Central New York Business Journal. Rick, a native of south central Pennsylvania, started his career as a local beat reporter for The Harrisburg Patriot-News. He graduated from Syracuse University in 2008 after interning at the Patriot-News and The Syracuse Post-Standard.

 

Number of Pages: 103 (3.2MB PDF)

 

Date Released: September 23, 2019

 

ISBN (print edition): 978-1-7327300-3-8

 

Group Orders: For information on purchasing multiple copies at a bulk discount, please email [email protected].

Special reports are intended for use solely by the purchaser and are watermarked accordingly.
 

Support: Please email [email protected] with questions regarding the report or your order.

 

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