Private colleges’ net tuition revenue from first-year students declined in 2021-22, study finds

Higher Ed Dive

Rick Seltzer

May 20, 2022

Dive Brief:

• Tuition discount rates for full-time first-year students attending private nonprofit colleges rose 2.1 percentage points to average 54.5% in 2021-22, a new record high, according to the National Association of College and University Business Officers.

• Average tuition discount rates also climbed for all undergraduates attending private nonprofits, increasing by 1.4 percentage points to 49%, an annual NACUBO study released Thursday found. That measure hit its highest recorded mark as well.

• Net tuition revenue from first-time undergraduates fell for just the second time in 10 years, with colleges that aren’t selective in admissions struggling most.

Dive Insight:

Colleges have long used grants, fellowships and scholarships to entice students to enroll or help them afford the cost of college. The rates at which they discount tuition are closely watched in light of concerns about the cost and value of college.

Discount rates are also particularly important for the business model at private nonprofit colleges, most of which depend on tuition for the majority of their revenue. NACUBO’s study is based on responses from 359 nonprofit colleges, with average enrollment of 2,788 undergraduates.

The trends observed among private institutions can be important for higher ed more broadly, said Ken Redd, senior director of research and policy analysis at NACUBO.

“Even at public institutions, we know discounting happens,” Redd said. “Our study is pointing to some trends that, even though we focus on private universities, are a proxy for trends that are going on not just in higher ed but in society at large.”

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