Is Tuition Discounting Leading Some Colleges Off a Cliff?

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Published by The Chronicle of Higher Education

As growing numbers of private colleges offer steep tuition discounts to most of their students, the practice’s costs are starting to equal or exceed its benefits, a new study concludes.

The analysis of data from about 450 small, private baccalaureate colleges found that some actually had begun to lose net tuition revenue in using grant-aid offers to attract more students. For many, increases in tuition discounts had ceased to produce enrollment increases large enough for the practice to offer significant dividends.


The study’s conclusions were praised as "dead-on" by Craig Goebel, a principal with the Art & Science Group, a higher-education consulting firm that annually advises more than a dozen colleges like those examined. Many such colleges "are reaching the limit" in terms of their ability to use discounts to increase net tuition revenue, and the gains they reap from doing so tend to be short-term, he said.

Mr. Goebel said he encourages colleges to rethink "the real substance of what they are offering" — their curriculum and programs — to "do more to differentiate themselves and therefore create greater appeal among prospective students."

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