Tuition discounting is no longer attracting students to private colleges.
In the 2012-2013 academic year, the average cost of tuition at a private, nonprofit college was $29,056, marking a 4.2% increase over 2011-2012, the College Board reports. Still, more than 3.8 million people attended a private university as either undergraduate or graduate students in 2010.
This high enrollment rate is partially due to tuition discounting, a practice in which private schools lower their tuition for select students through grants, scholarships and other forms of financial aid. In doing so, they can drastically reduce their sticker prices for prospective students.
A new report by the National Association of College and University Business Officers (NACUBO) states that in 2011-2012, the average discount rate for first-time, full-time freshmen hit 45%, up from 44% in 2010-2011. The average discount rate for all undergraduates stood at 40%.
While reducing their tuition by 40% to 44% can certainly save students a great deal of money on their overall college costs, the NACUBO report found that tuition discounting does not seem to hold the same appeal it once did. Of the 383 private colleges surveyed, more than half said their freshman enrollment is declining, despite their tuition discount programs. This trend was even more profound at small, undergraduate schools.
Almost half of chief business officers said the reason behind their slipping freshman enrollment was cost. As the price of attending a private institution continues to rise, students are opting to attend a lower-cost college.
Previous research backs up their suspicions, showing that students are increasingly sensitive to the cost of earning an associate's, bachelor's or master's degree. According to the Cooperative Institutional Research Program at the University of California - Los Angeles' Higher Education Research Institute, about 43.3% of students said the cost of attending a college was very important when choosing which institution to attend, marking an increase of 2.7 percentage points from 2011. This figure was also an all-time high since 2004, when the program first began surveying students on their feelings about college costs.
Along the same lines, Princeton Review's College Hopes and Worries survey found that when applying to college, students' biggest worry is the "level of debt incurred to pay for the degree."