Discount Tuition

A week or so ago, I was in a meeting with some financial aid administrators from local colleges. We started talking about this year’s admissions and what they were seeing from families and students relative to the current recession.

At one point, one of the gentlemen turned to the other and asked, “Do you guys discount your tuition?” The other fellow replied, “Yeah, we have to – everybody does.” This intrigued me so I asked them for an explanation. Here’s what they told me.

They said that for the past few years, they have “discounted” their tuition by offering larger amounts of scholarships to students in order to attract them to attend their institution. Okay that makes sense. But they went on to say that parents like the “bragging rights” of saying that their kid received a large scholarship to attend the school – implying that the kid is something special and the school really coughed up the money to get the kid to attend.

Not really. What the schools are doing is inflating the tuition cost, “providing” larger scholarships giving the appearance of a good subsidy, and getting families to pay the tuition to attend their school.

My question to them was, “You mean to tell me this is like the MSRP of a new car? ” The answer: “Exactly.”

My next question was, “Why not lower the tuition for everyone and the price to attend is the real price.” The answer: “Then parents wouldn’t feel the pride of their child getting into a “prestigious” school.”

I have to admit this is clever marketing and sales. Don’t ever try to tell me that higher education is not a business. It’s always about the dollars.

We still have a long way to go …..