5/7/2013 2:43 PM ET|
As college tuition rises, so do the discounts
Private schools are trying to keep costs manageable by making more grant and scholarship money available.
According to data released Monday by the National Association of College and University Business Officers, the so-called tuition discount rate for private universities hit an all-time high of 45% for incoming freshmen last fall. That's the seventh straight year that grants and scholarships as a percentage of tuition have increased, according to The Wall Street Journal.
Schools may have to offer even more inducements this year because many non-top-tier institutions are 10% to 20% short of their enrollment goals. The tuition discount fell slightly at public institutions last year.
"Except for the most exclusive schools, private colleges increasingly are vulnerable to the stagnant wages of many families, deepening student debt, the uncertain job market, growing questions about the value of costly four-year degrees and unfavorable demographics," according to The Journal.
Market pressures are forcing many universities to hold the line on tuition, but that's going to be tougher to do because the numbers of high school graduates are leveling off. Students are also increasingly attending lower-cost community colleges and transferring to four-year schools when they have a better idea of what career they want to pursue. These trends will put more strain on university budgets, which have been slashed during the recent economic downturn.
Sadly, even if they pay less for college, many students never fully use their degrees. A study released earlier this year by the Center for College Affordability & Productivity found that 48% of employed college graduates are in jobs that require less than a four-year college education, and 37% of grads work in jobs requiring no more than a high school diploma.
Parents sometimes have to tell their kids that the college of their dreams would create a financial nightmare for them when they're older. But if the tuition discounts keep rising, at least the sticker shock may not be quite as bad.
Jonathan Berr is thankful his student loans are long repaid. Follow him on Twitter @jdberr.
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