“ Edmit just did something where, because of COVID, they upped their private colleges going out of business from about 240 to about 340. “I believe as a result you’re going to see more schools go out of business,” Lapovsky said. The slimmer margins are not a good sign for private colleges, especially those that are already extremely tuition dependent, said Lucie Lapovsky, principal at Lapovsky Consulting and former president of Mercy College.
A year earlier in 2017-18, net tuition revenue decreased by nearly a full point.
In 2018-19, institutions saw a three-percentage-point boost in net tuition revenue. It’s difficult to parse out a trend of net tuition revenue over the past several years. Net tuition revenue per undergraduate increased in 2018-19, but at less than half the rate it had the year prior, the report shows. “It’s more likely the case that essentially the demand was weakening enough that institutions have to discount more to get the same number of students to enroll.” “It’s unlikely that everyone was just wrong about how much aid to give,” Bloom said about the NACUBO results. The top three reasons institutions cite for flat or declining enrollment are increased competition from other colleges, price sensitivity of students and the changing demographics of prospective students. “In the last few surveys, we’ve seen that the share of institutions reporting declines in enrollment, despite the increasing discount rates, has been around 45 to 50 percent,” said Ken Redd, senior director of research and policy analysis at NACUBO.īetween fall 2016 and fall 2019, 54 percent of institutions experienced no change or declines in enrollment, the report shows. The goal, Bloom said, is to increase enrollment, which will therefore offset the cost of the aid.īut the NACUBO report shows this isn’t working for all colleges. The process determines how much institutional grant aid will be awarded to different groups of students and “calibrates” that aid with net tuition revenue numbers. To calculate financial aid awards, colleges often work with outside consultants to perform financial aid optimization, said Alex Bloom, associate director of research at consulting firm EAB.
Tuition discount rates have been trending upward for a decade. The report defines the tuition discount rate as “total institutional grant aid awarded to first-time, full-time, degree- or certificate-seeking first-year undergraduates as a percentage of the gross tuition and fee revenue the institution would collect if all students paid the sticker price.” Results are based on a survey of 366 private nonprofit institutions and Integrated Postsecondary Education Data System data. The rate for all undergraduates in 2018-19 was 46 percent, up nearly two percentage points from the year prior. Tuition discount rates reached an all-time high in 2018-19 as net tuition revenue growth slowed and enrollment declined at nearly half of colleges, according to a new report by the National Association of College and University Business Officers.Īccording to the annual NACUBO study, the average tuition discount rate for first-time undergraduate students at private nonprofit colleges in 2018-19 was 51.2 percent, three percentage points up from 2016-17 and one percentage point short of last year’s prediction.