Discount rates at universities are rising in order to attract incoming students amid yearly increasing college tuition prices, according to the National Association of College and University Business Officers (NACUBO).
Inside Higher Ed defines tuition discounting is the practice of advertising a list price for enrollment and offering deals that reduce it amount for select students. A study found discount rates at its highest at 45.1 percent for the 2016-17 school year. Oklahoma Christian University’s discount rate, however, was 47.3 percent.
According to a tuition discounting study by NACUBO, private colleges and universities are discounting their tuition revenue at the highest rates yet. The press release said the estimated institutional tuition discount rate was record setting at 44.2 percent. NACUBO found the discount rate was highest at 45.1 percent for all undergraduates at small institutions with total enrollment fewer than 4,000.
“Among respondents, 44 percent said they expect discounting will be sustainable for their institutions in the long term…while 41 percent either said they consider it unsustainable or sustainable in only the short term,” NACUBO said.
Judy Cuellar, director of student financial services, said Oklahoma Christian’s discount rate is similar to other four-year, private and Christian universities.
“Many universities have had increasing discount rates over the past few years as the competition to win students has increased,” Cuellar said.
Clint LaRue, executive director for budget and financial services, said Oklahoma Christian’s NACUBO undergraduate discount rate is a little higher than the average of other Council for Christian Colleges & Universities (CCCU) schools.
“Last year, Oklahoma Christian’s undergraduate discount rate was 47.3 percent,” LaRue said. “The average CCCU undergraduate discount rate was 44.9 percent. However, the CCCU’s average discount rate has been trending up over the past several years, whereas Oklahoma Christian’s rate has remained relatively flat.”
Last year undergraduate tuition revenue was about $39.6 million with scholarships and discounts of around $18.7 million, and a net revenue was about $20.9 million.
“This year’s forecasted undergraduate net revenue from tuition, fees, room, and board will be about $32.4 million, which represents about 78 percent of OC’s projected revenue this year,” LaRue said.
According to LaRue, this year’s average undergraduate student net cost is $13,750, which includes total tuition, fee, room and board cost. He said last year’s average net price for CCCU schools was $21,591.
Not only is Oklahoma Christian’s discount rate 2.3 percent higher than the average Christian university, its net cost is about $8000 less per year.
The New York Times released an article on the difficulties of calculating costs for college. According to the article, after years of most financial aid given to students based on need, merit aid started in the 1980s to attract top students and improve colleges’ rankings.
“By giving discounts to families that might otherwise pay more, there may be less money for lower-income students who truly cannot afford the school,” the New York Times said.
Oklahoma Christian gives out the largest portion of $19,948,262 in institutional scholarships and grants per year in merit-based scholarships, Cuellar said. Students earn these scholarships for their ACT and SAT scores and their high school GPA. La Rue said $10.9 million goes toward the academic scholarships.
“Some students are eligible for need-based grants based on their family financial need, which is determined by the FAFSA,” Cuellar said. “Music, theater and athletic scholarships are what we call performance-based scholarships and are provided for those who show outstanding performance in those areas.”
According to LaRue, financial need awards, also called Oklahoma Christian grants, helps meet students’ demonstrated financial need as shown by the FAFSA after other institutional awards.
“If a student has $10,000 of financial need, but has a $10,000 academic scholarship, that student’s financial need has been met,” LaRue said. “However, if that same student has $12,000 of financial need, that student would have an additional $2000 of financial need and may therefore be eligible for an OC grant.”
The New York Times article said the universities they spoke with were unwilling to share specific qualifications regarding merit aid. Oklahoma Christian, however, provides the GPA required for each merit-based scholarship on its website. Cuellar said prospective students could find out more about possible scholarships and grants by using the university’s net price calculator.
“The Financial Services office also lists outside scholarship opportunities for our current or prospective students on our Facebook or Twitter accounts,” Cuellar said. “Any time we hear of a legitimate scholarship, we will post it. Sometimes there are multiple posts in a single day. It is worth taking the opportunity to review.”