Private college tuition discount rates hit new highs during the pandemic

by Emma

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Dive Brief:

  • Tuition discounts at private nonprofit colleges are expected to hit a new record in the 2020-21 academic year, according to preliminary data from the National Association of College and University Business Officers.
  • Discount rates reached 53.9% for first-time, full-time students and 48.1% for all undergraduates across 361 schools studied — a year-over-year increase of more than two percentage points for both groups.
  • The data doesn’t include the tens of billions of dollars in federal coronavirus relief aid the sector received during the year.

Dive Insight:

Private nonprofit colleges for years have offset a growing share of students’ tuition costs, but the latest data shows that trend accelerating. That’s in part because students’ financial needs increased during the pandemic, said Ken Redd, senior director of research and policy analysis at NACUBO.

Nearly 90% of first-year students and around 83% of all undergraduates received some form of institutional grant aid, the data shows, and it covered a slightly higher share of their tuition and fees than the year before. Across all institutions surveyed, the average published tuition and fees rose less than 1% in 2020-21. Many schools across the country lowered or froze their posted tuition prices during the pandemic. 

NACUBO instructed respondents not to include federal coronavirus relief money in their discount rate calculations, Redd said. A large share of the more than $70 billion in federal coronavirus relief dollars designated for colleges so far was earmarked for students. So it’s likely students received additional funds from their schools on top of the discounts captured in the survey.

Chart showing tuition discount rates accelerating during the pandemic.

 

The majority of respondents said they either charged students different prices for in-person and online/hybrid learning or offered a discount for the latter. These price changes were not included in the tuition discounting calculations, Redd said.

Discounts, along with declining undergraduate enrollment, contributed to an inflation-adjusted 2.5% decrease per undergraduate in net tuition and fee revenue in 2020-21, NACUBO explains. 

Undergraduate enrollment contracted 2.6% across the sample — a slightly smaller decrease than was reported for all undergraduates in fall 2020. 

A majority of respondents said they believed the pandemic would have a long-term impact on revenue from tuition and room and board, as well as changes in enrollment. 

Colleges are adjusting their recruitment and enrollment tactics to address these headwinds. More than half of respondents said they shifted to test-optional admissions, while similar shares implemented new or expanded recruitment, retention or financial aid strategies.

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