Tuition Discounting: Institutional Aid Patterns at Public and Private Colleges and Universities

Recent data from the College Board’s Annual Survey of Colleges reveal significant variation in institutional aid patterns among colleges and universities. The undergraduate tuition discount rate — the ratio of institutional grant aid to published tuition and fee charges — is higher at private institutions than at public institutions, but there are also notable differences within sectors. It is not just the magnitude of the discounts offered that is important but also the purposes of the discounts and the distribution of the grants to students in different circumstances.
Since 2000-01, the total discount rate has been relatively stable in the public sector but continues to rise in the private sector. Breaking the discount rate down into aid that meets financial need, aid that goes beyond financial need (or goes to students with no documented need), and the more specialized categories of tuition waivers and athletic awards, Table 1 shows that tuition waivers are the dominant form of discount at public two-year colleges, aid that meets need accounts for two-thirds of the discounts at private not-for-profit four-year colleges, and all forms of discounts are important at public four-year institutions