Buy Now! College On Sale!

I couldn’t resist noting the synchronicity of today’s front-page New York Times article, “In Tuition Game, Popularity Rises with Price” and the Chart You Can Trust we released today. The New York Times piece did a good job of getting at the red flags of tuition discounting—merit aid going to well-off students, the increasing uniformity of pricing in higher education, and high sticker prices that are used as a marker of quality and at the same time dissuade qualified, low-income students from applying. But, the BIG reason tuition discounting is disturbing was summarized in the last line of the article, “We don’t know.”

Students and their parents don’t know the true price of a college when they apply, or how much of a discount to expect in their financial aid letters. In our Chart You Can Trust, we focus on a subset of colleges—small, lower tuition private colleges—which, on average, offer a discount to 92% of their freshmen. When 92% of students receive a discount, what is the real price of the college? And who receives those discounts? While some colleges limit aid to students with financial need, others use discounts to boost the SAT scores and average GPA’s of their incoming class. One thing is certain: with the growing use of tuition discounts by both public and private colleges, tuition discounting needs to become part of the conversation on tuition pricing and affordability.

Tuition discounting also ties in with the conversation on transparency and accountability in higher education. As is apparent in the New York Times article, price is currently used as a proxy for quality when students and parents evaluate colleges and universities. An increase in price, however, does not necessarily mean an increase in quality. Often, the revenue generated from price increases simply goes to providing discounts to more students and is not invested in educational resources. Judgments on higher education quality need to be more sophisticated. They need to be about teaching and learning and not simply how much you paid.