Opinion: College Discounting Does Students A Disservice

"As nearly everyone’s aware, the price of tuition at a private college in the United States has gone up and up and up. … Most people don’t realize, however, that most students don’t pay nearly that amount because, on average, almost half of that tuition is being paid by the institution in the form of student aid," Lucie Lapovsky writes in a Forbes opinion piece.

"This significant amount of tuition discounting, the wide variation in the amount of aid granted and the uncertainty around the true price results in an imperfect market for higher education and does a disservice to students, their families and American higher education in general. Because buyers can’t know what they will actually pay until the acceptance letter arrives, many students don’t apply to schools that they should consider and others apply to schools that they can’t afford assuming that they will get all the aid they need only to find out that they can’t afford them once accepted. …

This puts undue stress and angst on students and their families and leads to a very imperfect market where suboptimal choices are made. Rare indeed is the retail good that is discounted by half. And we’re not talking about just any good or service: higher education is an investment with a payback lasting a lifetime with both private and public returns. It impacts not only an individual’s income but their contribution to society. …

Each school uniquely defines the attributes that they most want in their students as well as the amount of funds that they are willing to allocate to get their class. This is what leads to the unpredictable results. We need to develop a much more transparent system so that students and their families have full information on the net price of their choices just like the information that the catalogue provides on the academic programs that each school offers."

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