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Categorized | Paying For College

Good News – Tuition Discount Rates Are Increasing

collegemoneyOf course this is only good news for students/families and not necessarily for the colleges and universities that are providing the discount…

As you go through the college search process, it is very unlikely that you will hear the word discount being used by anyone from the admission/recruitment office. Even though every college does it, they prefer to spice up the term discount and call it something more along the lines of a scholarship, a grant, an award, or a prize. Those descriptions provide a much more warm and fuzzy feeling than the word discount. So when you get your financial aid package in the mail from your school, essentially you are getting a piece of paper acknowledging what your discount will be from the sticker price that the school has on their cost of attendance. You will compare these financial aid packages (discounts) to the costs and see which school is the best fit financially.

The Good News For You…

NACUBO (National Association of College and University Business Officers) recently reported that the average discount rate for freshman entering college for the Fall 2008 semester rose to 41.8%, which was up from the 39.1% achieved the year prior. Since a portion of discounting is made up of need-based aid and is directly related to your FAFSA results, it is easy to understand why discount rates have been increasing for colleges and universities across the nation in the past year or two as our economy and job market has been weathering a tough financial storm.

Projections for future discount rates have not been determined but as a family’s ability to pay for college is decreased it is only natural to assume that the average discount rate is going to continue to increase in order for schools to be competitive in recruitment.

The Bad News For Colleges & Universities…

Discount rates climbing to record highs equates to less revenue being generated by the school. When less revenue is generated that means the institutions will be required to implement cost-cutting measures to help balance the budget. Massaging the budget translates to salary and hiring freezes, elimination of programs, staff reductions and other financially savvy ways to reduce expenses or increase revenue. All-in-all, it definitely makes for a tough time for those employed in higher education.

So…  I guess with national discount rates being at an all time high, now more than ever is a great time to get a quality education at an affordable cost!

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