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Tuition Discounting Reaches Historic High for Private Colleges and Universities

New reports from Ruffalo Noel Levitz reveal trends in discount rates and net revenue for private and public institutions

June 7, 2018—For private colleges and universities, tuition discounting has hit an all-time high and has increased dramatically in the last 10 years, according to the benchmarks in the 2018 Discounting Report.

The study from Ruffalo Noel Levitz, the leading provider of higher education enrollment, student success, and fundraising services, is based on data from 220 private colleges and universities. The results show the pressure to balance need and affordability for students with the rising cost of college.

  • Tuition discounting at four-year privates reached 42.6 percent in 2017 up from 34.1% in 2008.
  • Private institutions in the study saw a tuition increase of 3.2% in 2017.
  • Average unmet need for needy students reached $10,525 in 2017. This has remained relatively stable since 2014, but had nearly tripled from $3,843 in 2007.
  • 70.9% of all admitted freshmen filed the Free Application for Federal Student Aid (FAFSA), also a record high.

“There are a confluence of factors at work here,” said Wes Butterfield, vice president at Ruffalo Noel Levitz. “Rising tuition levels and increased need among students and their families are certainly two of the main culprits, but there’s also greater competition for students and increased price sensitivity among those students. It’s frankly easier for students to compare aid packages and shop around now than it was 10 years ago.”

Despite the increased discounting rates, net revenue for private institutions also rose to a new high of $23,415.

A separate version of the report for public institutions showed more stability for public colleges and universities, with discount rates actually down to 15.9% from 16.6% the previous year. However, net revenue growth also remained relatively flat, an issue for public institutions that have become more tuition-dependent in an era of declining government funding for public higher education.

These challenges are likely to increase in the coming years, in part because of an increase in the number of first-generation students entering college. “First-generation students come from families that have greater financial need,” said Butterfield. “They are also often less informed about the financial aid process. This is going to cause accessibility issues for these students with private institutions and increase pressure on public institutions as they try to balance their ability to serve needier students with growing revenue needs.

“These challenges really require institutions to become more data-informed in their awarding,” said Butterfield. “They need to know exactly how each dollar will impact enrollment, because there simply isn’t much room for error in this environment.”  

For a copy of the 2018 Discount Report, visit www.RuffaloNL.com/Discount.

About Ruffalo Noel Levitz

Ruffalo Noel Levitz is the leading provider of higher education enrollment, student success, and fundraising solutions. More than 1,900 colleges, universities, and nonprofit organizations rely on RNL for advanced analytics, personalized engagement, and industry-leading insights to achieve their missions. The firm is focused on the entire lifecycle of enrollment and fundraising, assuring students find the right college or university, graduate on time, secure their first job in their chosen field, and give back to support the next generation. Ruffalo Noel Levitz conferences, research reports, papers, and articles help clients stay on top of current trends.