Sticker Price = $20,000 Dealer offers to sell it for $18,000 The “discount” is $2,000, or 10% off the sticker price. The buyer pays a net of $18,000, and the dealer receives a net of $18,000 What’s another way for the dealer to make $18,000?

“The process by which the institution offsets its published tuition price (sticker price) with institutional grant aid for enrolling students”

Numerator: Unfunded + Funded Institutional Gift Aid (but not Tuition Remission) Denominator: Gross Tuition Revenue (or tuition + fee revenue) NOTE: Gift aid targeted at other than paying tuition (like a housing grant) may be excluded from numerator)

Numerator: Unfunded Institutional Gift Aid (not funded IGA or tuition remissions) Denominator: Denominator: Gross Tuition Revenue (or tuition + fee revenue)

Can be calculated for the whole undergrad population. Can be calculated for FT, FT, DS freshmen only. Some use all direct costs (tuition, fees, room, board) in the denominator (Noel Levitz)

The institution is concerned with maximizing net revenue (or if at capacity, maximizing net revenue per student). The most helpful metric is the unfunded institutional gift aid discount rate.

Students/families are concerned with minimizing net cost (sticker price – T,F,R,B – minus all gift aid/discounts). A good metric for them is total direct costs (tuition, fees, room, board) minus total gift aid from all sources (federal, state, institutional, and private).

High Tuition, High Aid (high discount) Lower Tuition, Low Aid (a small but growing number of institutions are slashing both their sticker price and their discount rate)

High sticker price conveys “quality” (Chivas Regal effect) Everyone likes getting a “deal” A Scholarship makes a student feel special Selective institutions can use aid to “sculpt” the class (SES, diversity, talent, etc.)

High sticker price keeps some families from even considering a school. Consumers are getting savvy to discounting. Fear of where escalating discounting will lead.

(for institutions with room to expand) Maximizing Net Tuition Revenue – regular year-over-year increases in the net from tuition to support school operations. (for institutions at capacity) Maximizing Net Tuition Revenue per Student

Stay current with Tuition Discounting in the literature (College Board, NACUBO annual study) Use IPEDS data to compare your metrics (price, average discount) with peer institutions Participate in consortium studies.