Pandemic drives deeper discounts at private colleges

A survey done of higher education business officers shows the trend rising to attract and keep students.
By: | May 20, 2021
Tennessee has offered $20 million in grants to help public and private colleges and universities improve technology to ease the transition to online learning. (GettyImages/Carol Yepes)GettyImages/Carol Yepes

A new report released by the National Association of College and University Business Officers shows the increasing trend of deep discounting being done at private institutions to attract and retain students.

The 361 nonprofit private colleges and universities surveyed for the 2020 NACUBO Tuition Discounting Study averaged a nearly 54% reduction in tuition for first-time, full-time students and more than a 48% discount for all undergraduates, the most since the organization began its reports.

“Tuition discounting remains an important tool for private, nonprofit institutions to enroll and retain students while making a college education more affordable and attainable for them,” said Ken Redd, senior director of research and policy analysis at NACUBO. “This year’s Tuition Discounting Study signals that sustained efforts in financial aid and admissions strategies may be needed to increase access and success as we continue to adjust to the potential impacts of the COVID-19 pandemic.”

Researchers noted that the pandemic forced institutions to offer more incentives – grants, fellowships, and scholarships – during the past year. And it is likely that these trends won’t change much in the near future.

Undergraduate students have between 54% and 60% of their tuition and fees covered through grant aid, according to the study. Just under 90% of students who attend those institutions are getting some type of grants from them.

The fallout from those decisions is that around 80% of business officers who were polled said they will see big gaps in net tuition revenue, room and board revenue, and enrollments. The majority are working to offset those numbers by employing new retention and recruitment strategies, such as going test-optional, according to the NACUBO.

Since 2016, the NACUBO reports that net tuition and fee revenues have dropped (although just slightly in the previous year), with the period from 2019-20 to 2020-21 showing the sharpest declines. Revenue fell more than 6% for first-time students and 2.5% for undergrads overall.

As has been noted in reports from the National Student Clearinghouse Research Center – despite the discounts being offered by these institutions – enrollment at these institutions fell around 5% for first-time students and 2.6% for undergrads.