When Matt, a 17-year-old public high school student in Brooklyn, New York, got his acceptance into college this spring, his parents were surprised. An AB student whose favorite hobbies are hanging out with friends, playing video games, and smoking weed, Matt entered Bennington, a liberal arts school with 700 undergraduates in Vermont. rural which ranked # 286 on Forbes’ Best Colleges list. With the acceptance came what appeared to be an extremely generous financial offer to her middle-class family. He’ll only pay half of Bennington’s Sticker price of $ 77,000. (Matt’s father has requested that his son’s real name not be disclosed to protect family privacy.)
According to 2020 tuition discount study, released today by the National Association of College and University Business Officers (NACUBO), Bennington’s offer is typical. Private colleges are giving students escalating tuition reductions. In the 2020-21 academic year, private non-profit colleges cut freshman tuition fees by a record 53.9% on average. This meant that the average freshman paid only 46.1 cents on the dollar in tuition.
NACUBO is a Washington, DC membership organization of executives responsible for the financial health of colleges. For the study, he collected the results of surveys from commercial agents at 361 US institutions, including Brown, Dartmouth, Fordham and Occidental.
According to Kenneth Redd, senior research director at NACUBO, the study didn’t just take into account the money colleges gave to students who needed help paying for tuition. Since the mid-1970s, colleges have tried to attract students with money called Merit Aid. They use these dollars to attract talented athletes, artists and academics. “A school could use merit aid to attract a future first cellist,” says Redd.
In the 21st century, the merit support system has become a fine-tuned machine, with registrants working either internally or for consulting firms like Maguire partners, by connecting candidate data to algorithms that spit out a dollar amount designed to maximize the chances that a desired student will accept an offer.
NACUBO has studied the reduction in tuition fees over time and found that it continues to increase. Redd says there are two reasons for escalation. âThe first is that the competition for students has now become extremely fierce,â he says. With constantly falling birth rates, fewer young people are enrolling in university. The second reason: more families are strapped for cash. âIt has been exaggerated by the pandemic and the people getting sick and losing their jobs,â Redd said.
Robert Massa, a former enrollment officer at Johns Hopkins and several other schools, agrees. âIt’s the price that is being charged and the inability of families to pay that price that is the main story here,â he says.
But if schools regularly practice discounts, why don’t they just lower the price of tuition? Some colleges did, including Drew University in Madison, New Jersey, where Massa previously worked. In 2017, he reduced tuition fees by 20%, to $ 40,000.
But while most schools offer assistance to the majority of students, they charge part of the student body for full freight. âSchools still cannot afford to lose this margin,â says Massa.
A third piece of the tuition fee puzzle is the growing cost for institutions to deliver a sought-after college experience, especially in the age of Covid, says Massa. âIt is increasingly expensive to pay for the necessary technology, insurance and regulatory compliance,â he says. âThe costs are going up. “
The bad news: Families will have to keep trying to decode sticker prices, financial aid applications and the secret merit aid system.
When Brooklyn high school student Matt received his offer of help from Bennington, he also heard about Bard, a liberal arts college in Annandale-on-Hudson, New York, which ranks higher on the best list. Forbes colleges, but not as much, at No 230. Matt entered Bard but received an offer of zero help, likely because Bard’s enrollment manager felt that a student with his data points was likely to accept without an aid kit.
âThe maze of calculating tuition fees and financial incentives was a mystery,â says Matt’s father. âIt was opaque and impossible to understand how the system works. “