Trends in Tuition and Discounting

On August 25, 2015, the National Association of College and University Business Officers (NACUBO) issued its tuition discounting study, which gathered data on more than 400 colleges that are members of NACUBO that contributed to the study.

The results of the study are unfortunately are not very positive, as many colleges and universities continue to struggle with matching their pricing model with the current market. The study by NACUBO echoes similar sentiments in publications from Moody’s, the College Board and others over the past several months, about the continued challenges ahead for the higher education sector.

Some of the highlights from the NACUBO study’s press release are:

• Despite the increase in discount, 48% of the institutions included in the study reported that their freshmen enrollment was either flat or declined between fall 2013 and 2014.
• Nearly one-third of the study respondents reported that their enrollment either remained flat or decreased for freshmen and the remainder of the undergraduate population.
• Many colleges studied were challenged to grow net tuition for incoming freshmen over the period from 2010 to 2014. The projected increase for 2014 was only 0.4% for the study group. When inflation was factored into the calculation, the growth was actually negative for 2011 and 2014.
• In 2014 alone, the impact of inflation caused tuition to decline 2.5% in inflation adjusted dollars. The trend for freshmen was indicative of the trends for the remainder of the undergraduate population.

With shrinking (or remaining flat) federal and state aid, many colleges and universities have seen their tuition dependence increase over the past few years, which is presenting an increased challenge for the intuitions’ administrations to balance a high-quality education with controlling costs while attracting new students with a competitive financial aid packages.

A copy of the full study is available for purchase from NACUBO.

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