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Private Colleges’ Tuition-Discount Rate Hits All-Time High

Private colleges’ discount rate — or the average amount of tuition revenue they devote to financial aid through grants — has again reached an all-time high. That’s according to an annual survey by the National Association of College and University Business Officers, which doesn’t paint a pretty financial picture for the institutions.

The discount rate for first-time, full-time freshmen reached a projected 48.6 percent in the 2015-16 academic year, up from 47.1 percent the previous year. For all undergraduates, the rate was 42.5 percent.

Colleges use tuition discounting as a strategy to increase enrollment, among other things. But according to the survey’s other findings, the strategy does not appear be to paying off. Net revenue growth for the colleges was projected to be just over 1 percent per first-time, full-time freshman, a decrease from the previous year, and 37.5 percent of surveyed institutions had enrollment declines among both their first-year classes and their entire student bodies from 2014-15 to 2015-16.

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