Tuition Discounting: An Institution?s Friend or Foe?

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Audra Kahr
Chief Financial Officer & Treasurer
Cedar Crest College

October 2016 begins an unprecedented time in Student Financial Services/Financial Aid offices nationwide. The launch of the Free Application for Federal Student Aid (FAFSA) ?prior year? release has made institutions pause across the country as they evaluate how to navigate through a new normal. There are more questions than answers as we inch closer to the enrollment cycle for fiscal year 2017/18.

Institutions know they are competing for a decreasing population of college aged freshman nationally, with some states experiencing a sharper decline than others.

With fierce competition comes the expectation of increased institutional aid as a method to draw students. What does this all mean for institutions? Will they experience sharp increases to their overall discount rate as a result? Be patient ? use discounting to your advantage and be nimble through the process.

The release of financial aid awards earlier has generally been well received. It provides students and families more time to arrange for payment or to look into alternative payment options. It is anticipated to relieve anxiety around the tight timeline for students to make their college choice. However, with more time generally comes more appeals, more re-evaluated packages, and eventually more institutional aid.

The tuition discount at many institutions has continued to grow annually. Gone are the days of low tuition discount rates and, in some instances, institutions are seeing a sharp increase in tuition discount. Sharp increases in tuition discount rates or increases that are not planned negatively impact an institution?s overall budget. On the flip side, tuition discounts, when managed properly can increase an institution?s overall net tuition revenue. The key is having a pulse on the aid being distributed.

Institutions that have been working towards increasing overall net tuition revenue, through a close management of their discount rate, will have a close eye on the impact of this critical year. As my home institution begins to navigate these waters, I offer you the following advice:

  • Communicate effectively to your students about the process. An informed student is one who will make better decisions.
  • If you need assistance navigating the waters ahead, seek help. There are quality consulting firms who are primed to help you sail ahead.
  • Be nimble ? new processes bring about questions and new situations that will need flexibility.
  • Be patient ? all the answers will not be visible in the first year of implementation ? you will need to tweak your process and/or your packages.
  • Be smart — use discounting to your advantage to drive net tuition revenue dollars.

Audra Kahr will be presenting at the upcoming ?Optimizing Your Tuition Discounting Strategy? conference in Silver Spring, MD on December 1-2, 2016. Get more information on the conference by visiting

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