When you go to buy a car, you often see an advertised price on the windshield that’s much higher than the price you’ll actually pay. At any car dealership or website, it’s expected that consumers will compare prices and bargain for a discount on their new car--and the secret is the same practice often applies at many universities and colleges around the country.
You may have heard of tuition and fee discounting, or tuition waivers, as you’ve been researching your college and financial aid options. Depending on where you end up attending college, you may be able to request a financial aid package that includes tuition assistance in the form of a discount or even tuition remission (aka free tuition), based on your expected family contribution and other factors such as your academic profile, extracurriculars, and demographic background.
First things first--what is a tuition discount? According to the Association of Governing Boards of Universities and Colleges (AGB), tuition discounting refers to when a college or university “offsets” its sticker price (aka the published tuition price) with institutional grant aid for students. The resulting discount rate refers to the “ratio of total institutional grant aid relative to gross tuition revenues” at a given college or university. Because of endowments and government subsidies, AGB notes that most colleges offer some form of tuition discounting, even for students who may be able to pay the full cost of tuition.
Of course (and unlike a car dealership), tuition and fee discounts aren’t advertised, nor do colleges publish what their tuition discount rate is. So it makes an interesting challenge for students and parents, one with an element of mystery--you know most colleges will offer tuition and fee discounts, but you may not necessarily know which schools have the most plentiful or generous discount rates. You know some schools may consider you a desirable applicant (and thus eligible for discounts), but are unsure which colleges would give you preferential packaging. In these cases, work with what you do know--your own plan to pay for college, covering your finances, college budget or savings, and expected family contribution. You can then start your own college research to find colleges that are a good fit for your academic and career goals. Next, based on your own calculations and research, you can then start discussions with admissions and financial aid counselors, and/or the registrar office, to determine which colleges are a good financial fit.
Simply put, tuition and fee discounting is one way to attract quality students. With college enrollments expected to decline over the coming years, universities and colleges must become more competitive to enroll and retain students. Tuition and fee discounts are just one method in a college’s admissions strategy to get that valuable enrollment.
Tuition and fee discounts are also a way to stay relevant with the expectations of a changing student market. According to Money, many financial aid counselors expect students and families to haggle to get a lower tuition price. So if you take the first financial aid award as the final offer, you’re missing an opportunity to potentially get more free money for college (and saving thousands by avoiding more student loan debt).
Additionally, special circumstances can lead to tuition and fee discounts, such as relocating to take advantage of in-state tuition rates, receiving qualifying scholarships (e.g., a tuition discount is dependent upon a student’s winning status), or being a legacy student.
Higher education is subject to market trends like any other sector, and how universities and colleges anticipate and plan for economic changes will affect their tuition prices--and rate of tuition discounting. As such, students can expect that tuition and fee discounts may be affected by a given college’s endowment, federal and state government subsidies, the college’s sticker price for the given academic year, and how close the college is to meeting its enrollment and retention goals.
When researching tuition and fee discounts, don’t just take the current academic year into account. Look at this year’s tuition price, as well as the expected tuition rate increases over the next four years (or however long you anticipate it will take you to graduate). When negotiating with college financial aid counselors, ask about the sustainability of any tuition and fee discounts through your graduation. After all, you’ll want to ensure each year--not just your freshman year--will fit with your budget and expected family contribution.
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