ERIC Number: ED476666
Record Type: Non-Journal
Publication Date: 2003-May
Reference Count: N/A
Unintended Consequences of Tuition Discounting. New Agenda Series[TM].
Davis, Jerry Sheehan
Tuition discounting, the use of institutionally funded grants to help defray students' college costs, came into vogue in the late 1970s and has since become standard practice at U.S. four-year colleges and universities. Institutions use the discounts for a variety of purposes, but generally their use is to manage or tailor enrollment in some respect. Campus officials try to use their tuition discounts strategically. Hoping to raise net tuition revenue, they put their money where it will attract the most students, especially students who are likely to help institutions achieve their missions and purposes. The best outcome of this kind of enrollment management is that some institutions have improved their enrollment and financial situations and have become stronger. Tuition discounting works for some colleges. This report, which draws on data from a variety of sources, shows that tuition discounting, although sometimes helpful in helping colleges tailor enrollment, does not always produce the desired enrollment effects and does not always increase institutional revenue. The practice by individual institutions, when combined across all institutions, has led to troubling outcomes for lower-income students. It has restricted their access to grant aid to attend four-year institutions, and it has reduced their opportunities to choose among public and private colleges. Tuition discounting has the potential to contribute to the failure of more than a few colleges if they continue to lose net tuition revenue to discounting. An appendix contains data tables. (Contains 10 tables and 8 references.) (SLD)
Descriptors: Access to Education, College Students, Economic Factors, Educational Finance, Financial Support, Higher Education, Income, Paying for College, Scholarships, Tuition Grants
Lumina Foundation for Education, P.O. Box 1806, Indianapolis, IN 46206-1806. Tel: 800-834-5756 (Toll Free).
Publication Type: Reports - Research
Education Level: N/A
Authoring Institution: Lumina Foundation for Education, Indianapolis, IN.