Tuition discounting is growing in higher education. Yet, by the very nature of the practice, the concept is confusing to prospective students as well as people who have spent their careers working in colleges and universities. A recent report by the National Association of College and University Business Officers (NACUBO) suggests that tuition discount rates are at an all-time high. The report further argues that the strategy is unsustainable and many institutions will have to reconsider their approach to discounting. But all of this raises the question: what is tuition discounting and why do colleges do it?
No one— or very few students— actually pays the listed tuition price for a university. The way to think about a university’s tuition is like the sticker price on a car. No one pays sticker. The question is how much of a discount you can negotiate.