Rising Tuition Discounts and Flat Tuition Revenues Squeeze Colleges Even Harder

By now, the picture painted in a new survey of tuition discounting, net-tuition revenue, and other enrollment trends should be drearily familiar to many in higher education. Theannual survey of private, nonprofit, four-year colleges, conducted by the National Association of College and University Business Officers, points to yet another year when discount rates for first-time, full-time freshmen reached a record high: 44.8 percent in 2012-13 and an estimated 46.4 percent for 2013-14.

More important, perhaps, net-tuition revenue remained stagnant, with an estimated growth of just 1.1 percent over the past year. While net-tuition revenue has seen peaks and valleys since 2000, the survey found that, on average and adjusted for inflation, colleges have seen no growth in net revenue for 13 years. Among the 401 institutions that responded to the survey, which was released on Wednesday, undergraduate enrollment was down at half of them. Those with declining enrollment said that price sensitivity was the biggest issue they faced, followed by increasing competition and a smaller pool of traditional students.

Of course, the question is, What does the survey portend for higher education? According to some observers, nothing good. The problem isn’t so much the money colleges are giving away in student aid, but the revenue they are not taking in. <Read more.>

Via Scott Carlson, The Chronicle of Higher Education.