Tuition: Who Pays What & Why
Updated: Nov 20, 2019
Hechinger Report: "While rising education costs and more amenities and luxury housing have played a role in pressing up the cost of college attendance, a great deal of college tuition inflation has been driven by an enrollment strategy that relies heavily on tuition discounting. With it, schools identify families willing and able to pay their advertised tuition or 'sticker price' through savings or loans, and use them to balance out the costs of students who would be more likely to enroll at other institutions due to financial concerns or academic competitiveness."
"The strategy is also known as price-discrimination — in which prices change based on who is paying and when — and has long been used to sell goods and services. It is why we are told to buy plane tickets three months before we want to take a flight. But unlike airlines, which may increase prices once the plane is nearly full and seats are harder to come by, colleges strategically drop their prices in order to get enough students to show up each fall."
"When demand is high enough that families who can afford it will pay virtually any price, discounting schemes can reduce tuition costs for other students to rock-bottom prices even as the school’s revenue remains robust."