Published On: Fri, Aug 28th, 2015

Report Finds 90% of US Freshmen Receive Grant Aid


According to a report released this week by the National Association of College and University Business Officers (NACUBO), almost 90% of freshmen in the US get grant aid from their colleges – an all-time high number, reports Susan Svrluga of The Washington Post. The grant money covered over half of the tuition and fees for full-time first-year freshman, an average of more than 54%.

The report suggests that students and parents might not want to be discouraged by the “sticker price,” said NACUBO President and CEO John Walda. Because discounts on tuition are on the rise and enrollment has dropped at about half the schools that participated in the survey, schools are introducing competitive pricing to lure students who might be considering a less expensive education.

There are multiple challenges facing college business officers, according to NACUBO, including lower net revenue from tuition, declining enrollments, and a greater demand from parents and students for grants to assist them with college costs.

In 2014, projected average net tuition revenue held steady, and most independent colleges get an average of a third of the school’s operating revenue in this way. The closing of Sweet Briar College last year seemed like a gloomy warning of the risks of tuition discounting to many college officials.

Sweet Briar’s president at the time and the school’s board said enrollment decline and discounts that were too generous hurt the school financially. Alumnae and supporters did all they could to keep the school open, which they did. Now with a new president with his eye on increasing enrollment, the college is open and students returned with their grants in place.

The 2014 NACUBO Tuition Discounting Study included data drawn from 411 private, non-profit, four-year colleges and universities. The average discount rate reached by these schools was 48% for freshmen and 41.6% for all undergraduates, up from 46.4% and 39.8%, respectively, in 2013-2014.

To put it another way, writes Kellie Woodhouse of Inside Higher Ed, higher education institutions awarded about 48 cents of institutional grants to freshmen for every dollar collected for first-year tuition and fees. NACUBO found that about three-fourths of institutional aid was awarded to students who demonstrated financial need.

“While the economy has improved, many families are still struggling. In a lot of communities you’re still seeing, if not job losses, jobs that don’t pay nearly as much as they did,” said Ken Redd, director of research and policy analysis at NACUBO. “There’s an increased inability [for needy students to go to college] and an unwillingness to pay even if you did have the money. The level of price sensitivity … is very real.”

About 89% of first-time, full-time freshmen receive some tuition discount, which is up from 88% last year. If all undergraduates are considered, the rates drops to 77%. As a whole, undergraduates received grants that cover an average of 48.9% of fees and tuition.

The surveyed institutions’ net revenues are expected to grow by only 0.4% per student next year. But this is not a new trend – after inflation adjustment, tuition revenue has been flat-lined for the past 13 years.

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Grace Smith

Grace Smith

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