How College Pricing Is Like Holiday Retail Sales

Career College Central summary:

  • A recent study of discounting at private non-profit colleges found that the average institutional grant has grown as a percentage of sticker price, hitting an all-time high of roughly 53 percent. But the report, released in May by the National Association of College and University Business Officers, also pointed out that while larger discounts are generally a good thing, students could still end up paying more depending on how much the sticker price is going up at the same time.
  • Like retailers, colleges and universities are increasingly getting more sophisticated about how they give out discounts, offering so-called "merit aid" to students they especially want to enroll.  Private universities have led the way in discounting, but as we've detailed, the practice has spread to public universities as well. Many state schools have moved toward the "high-tuition, high-aid" model by discounting for students with high test scores or for out-of-state students who will ultimately pay more than residents, even with a small discount.
  • Some colleges–mostly private colleges–will even price-match if students know to ask. (It's not unlike your local Best Buy, really.) The growing discount rates and the lack of transparency in the pricing of higher education have prompted some schools to try another approach. A few colleges and universities have opted for "tuition resets," announcing they’re slashing sticker prices by as much as $10,000–while often reducing aid.
  • Call it the J.C. Penney strategy. The retailer tried to move away from high-low pricing and move to "everyday low prices," only to find out the hard way that customers really, really love a discount.

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