Saturday, August 2, 2014

The "sticker price" for college

You’ve seen the scary headlines, like “College tuition jumps 500% since 1985.”

College IS expensive, and for many folks, I think, it’s not worth the cost.

Here’s another side of the story:
Despite steadily and acrophobically rising tuition rates, all of our private, nonprofit, four-year colleges combined have had essentially no growth in net revenues in the past 13 years.

Why? Because colleges each year are granting ever higher scholarships and tuition rebates—in effect, colleges are raising the tuition “sticker price” but actually charging less.

The so-called “discount rate”—the difference between “sticker price” and what first-time, full-time freshmen are actually paying—was estimated at over 46% in the academic year just ended.

Yep, you understand that correctly, the average freshman is actually paying barely more than half of the much-ballyhooed, sky-high tuition “sticker price.”

At my college, only a few short years ago the “discount rate” was about 32% and now it’s over 50%.

On top of that, about half of colleges in a recent survey said their undergraduate enrollment is declining.

Many colleges are hurting financially despite relentlessly raising their tuition.

What you charge is not necessarily what you get.

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