{"id":8731,"date":"2023-07-18T06:57:48","date_gmt":"2023-07-18T06:57:48","guid":{"rendered":"https:\/\/nortonnorris.com\/?p=8731"},"modified":"2023-07-18T13:24:51","modified_gmt":"2023-07-18T13:24:51","slug":"the-real-story-behind-the-rising-cost-of-college","status":"publish","type":"post","link":"https:\/\/nortonnorris.com\/the-real-story-behind-the-rising-cost-of-college\/","title":{"rendered":"The Real Story Behind the Rising Cost of College"},"content":{"rendered":"

For years I have wanted to pop into a college freshmen English class and ask: What are you paying this year to attend this university?<\/p>\n

\u201cThe annual NACUBO Tuition Discounting Study, reveals that the estimated average tuition-discount rate for first-time undergraduates at private colleges was 54.5 percent in the 2021-22 academic year. For all undergraduates, the average tuition-discount rate was 49 percent.\u201d<\/p>\n

So how would you begin to unpack the inequities that inherently exist with tuition discounting?<\/p>\n

For my friends in enrollment management. You know how the discount game works. And you can stop reading. For the general public, I\u2019d like to explain tuition discounting and financial aid leveraging. This topic doesn\u2019t get enough scrutiny in the rising college tuition conversation.<\/p>\n

So, What is Tuition Discounting?<\/h3>\n

College athletics is a great starting point. For the NAIA schools, and the NCAA DII and DIII institutions, student athletes comprise a large percentage of their enrollment. All schools can use their allotted athletic scholarship funds as they please within their appropriate divisional guidelines. Although the athletic division will determine the number of full-ride scholarships by sport, the individual school can decide on an award strategy. This may mean giving less $$ to more students, giving just a few full rides, no full rides, etc.<\/p>\n

If you eliminated student athletes, many tier 3 colleges would lose 30% of their enrollment.<\/p>\n

So, if you want to use a broad brush, it\u2019s safe to assume that almost every student athlete is getting at least a small scholarship. Translation: Discounted tuition.<\/p>\n

\n
Now let\u2019s talk about stacking awards. Here\u2019s an example. Coach Smith has a soccer star she wants badly to recruit. Her scholarship dollars only go so far, and she has decided that she wants to award more athletes and spread her money around. But she really wants Jane Doe and knows she needs to sweeten her deal. So she stops into the admissions office (pretty sure this happened to Dr. Jean Norris when she was VP of Enrollment Management at an NAIA college). The coach pleads her case and grovels for admissions to give Jane a \u201cleadership<\/div>\n
\"\"<\/div>\n<\/div>\n

award.\u201d It\u2019s a nebulous category and completely discretionary. The admissions director is on the fence and questions the ethics. But then the coach reminds her that she\u2019s always at the open houses and willingly jumps in to help admissions whenever they need a faculty speaker, etc. So the admissions director caves in and now the student athlete has 2 scholarships. Her original athletic award and her new leadership award. That\u2019s stacking.<\/p>\n

What about shaping your class? Many colleges put a lot of effort into having the proper mix of students. And have goals around diversity, gender, academic ability, financial need, in-state\/out-of-state, and domestic versus international. It\u2019s not unusual to have a sophisticated matrix to guide the awards. Here\u2019s what that might look like:<\/p>\n

First generation, non-Caucasian, high academic achievement, female engineering student = $$$$<\/p>\n

Caucasian, male, average academic ability, business student = $<\/p>\n

International student, no financial need, medium academic ability = 0 (they can pay cash!)<\/p>\n

Depending on the complexity of the matrix, you may have 20 or 30 cells. That means 20 or 30 scholarship strategies and awards.<\/strong> This is primarily institutional money and not federal financial aid. I don\u2019t think anyone has ever questioned if it\u2019s an endowed scholarship \u2013 which means those monies are on deposit in the college foundation and the college is allowed to
\nspend the interest.<\/p>\n

But what if it\u2019s a reduction in tuition? If you are a student or parent, you really don\u2019t care what the source is. If the college offers to reduce your cost of attendance you are going to say yes.<\/p>\n

The Real Problem with Discounting<\/h3>\n

So cut to the chase: If the average discount rate is 49% then some students are paying full freight, while others are paying nothing. Is it fair? Is it right? Can you even use ethical and higher education in the same sentence?<\/p>\n

Not sure how I feel about this whole situation. Students with the ability to pay, and relatively low academic ability will pay full tuition. Students with less ability to pay, and with higher academic ability will be granted some kind of real or manufactured scholarship. As a result, they pay only a portion of published tuition.<\/p>\n

Do All Colleges Discount?<\/h3>\n

No. If the college was accredited by the Accrediting Commission for Career Colleges and Schools (ACCSC) \u2013 one of the leading accrediting agencies for vocational schools, they would not be permitted to use a discount strategy at all. Every student would be charged the same. No exceptions.<\/p>\n

Here\u2019s a section below of the ACCSC Standards<\/a> that clearly prohibits the type of discounting in play at traditional college and universities:<\/p>\n

\n

ACCSC Accreditation Standards State:<\/h4>\n

a. Tuition costs and charges, tuition discounts, and all costs incidental to training are:<\/strong>
\ni. Fully, clearly, and accurately disclosed to the prospective student before enrollment and<\/span>
\nIi. Fairly applied.<\/span>
\nb. A tuition discount must be a bona fide reduction in the tuition that would otherwise be charged.<\/strong>
\nc. A grant or scholarship \u2013 as distinct from a tuition discount \u2013 must:<\/strong>
\ni. Be bona fide financial assistance whereby funds are applied toward a qualified student\u2019s costs;<\/span>
\nii. Be issued for recognized and acceptable purposes; and<\/span>
\niii. Include specified criteria that a student must meet in order to be eligible for and receive the grant or scholarship.<\/span><\/p>\n<\/div>\n

As a result, schools like Tulsa Welding School and Lincoln Tech don\u2019t have a discount rate.<\/p>\n

\n
\"\"<\/div>\n
\n

The Conclusion<\/h3>\n

Makes me think the evil for-profits as portrayed by many regulators, legislators (I\u2019m talking to you Dick Durbin) and reporters aren\u2019t so evil after all. In fact, I could argue that for-profit schools are more truthful, transparent, and ethical in their pricing policies than their private, not-for-profit counterparts.<\/p>\n<\/div>\n<\/div>\n

Sources:<\/h3>\n

https:\/\/www.accsc.org\/UploadedDocuments\/standards%20and%20alerts\/ACCSC-Standards-of-Accreditation-and-Bylaws-070122.pdf<\/a><\/p>\n

https:\/\/www.chronicle.com\/article\/tuition-discount-rates-continued-to-climb-at-private-colleges<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

For years I have wanted to pop into a college freshmen English class and ask: What are you paying this year to attend this university? \u201cThe annual NACUBO Tuition Discounting Study, reveals that the estimated average tuition-discount rate for first-time undergraduates at private colleges was 54.5 percent in the 2021-22 academic year. For all undergraduates, the average tuition-discount rate was<\/p>\n

<\/div>\n

Read more<\/a><\/p>\n","protected":false},"author":55,"featured_media":8732,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nThe Real Story Behind the Rising Cost of College - Norton Norris<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nortonnorris.com\/the-real-story-behind-the-rising-cost-of-college\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Real Story Behind the Rising Cost of College - Norton Norris\" \/>\n<meta property=\"og:description\" content=\"For years I have wanted to pop into a college freshmen English class and ask: What are you paying this year to attend this university? \u201cThe annual NACUBO Tuition Discounting Study, reveals that the estimated average tuition-discount rate for first-time undergraduates at private colleges was 54.5 percent in the 2021-22 academic year. 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