| When colleges and universities use their own financial resources to award grants and scholarships to students it is referred to as tuition discounting. This practice allows institutions to charge lower than "sticker price" tuition rates to selected students. The concept of tuition discounting is not new; for years, institutions have offered discounted tuition rates to students in order to reward merit, to assist financially needy students, and to expand diversity. In recent years, however, a fourth reason for tuition discounting has emerged at some institutions. For these institutions, the main purpose of tuition discounting is to fill otherwise empty seats in classrooms and to enroll enough students to remain fiscally solvent.; The primary purpose of this study of private, baccalaureate level institutions of higher education was to explore the pattern of tuition discounting between 1990 and 2000, to analyze variations in tuition discounting by institutional type, and to determine the relationship between tuition discounting and institutional financial health. The findings of this study indicate that tuition discounting is on the rise for this sector of higher education. Between 1990 and 2000, tuition discounting rates rose by approximately 7 percentage points. Second, tuition discounting does vary based on institutional demographics such as religious affiliation, size, endowment, and expenditures. Finally, tuition discounting does appear to have an impact on the financial health of institutions---it appears that tuition discounting is generally negatively related to institutional financial health. |
