Discounting exists in all industries. . . .
Of course. But Macys doesn’t calculate how much to discount the sweater to get you specifically to buy it.
Yes they do.
You SPECIFICALLY? I think not. Big data is used to cherry pick students. That said,
There are, IIRC, several levels of approaches schools use. General discounts and specific tuition discounting to lure desired students
Macy’s isn’t the correct analogy for college discounting. The college discount pricing model (i.e. merit aid) was borrowed from the airline industry.
Colleges and airlines both have high fixed costs and a product (a seat on the plane or a seat in the class) that expires unused if not sold by a certain time. The college/airline sells the same product (the seat) at a variety of different prices. The goal being to sell seats at prices which yields the highest possible aggregate revenue for the flight/semester before the plane takes off (or the semester starts). Hotels do this too.
Some schools have tried “everyday one low price” but that doesn’t seem to work so well in the college market.
Because people are now conditioned for the discount and it makes them feel good that it is called “merit”.
The discounted expensive sweater was the analogy used in the article, so followed along with that. IMO its more like buying a car. They will always know their bottom line numbers than the customer will, and the drive out price will vary. The airline seat is also a good analogy, but the buyer of the car can negotiate some, where’s the buyer of the airline seat gets whatever the sale price is that day.
@jym626, you can also negotiate for merit money at some schools.
In any case, both airlines and cares aren’t quite the right analogy. This is more like a country club/social club membership as they care about who they admit as well, not just selling something… The most exclusive ones are choosy and may discount for the right people. The ones lower down the scale are more like airlines just trying to fill seats.
That is the point, @PurpleTitan. Yes, you can in some cases negotiate for merit aid, like buying a car. You can’t catch a flash sale, like on an airline, but they do want to fill their seats, so the metric for who they offer the seats to may change with demand. Country clubs don’t typically have different price tiers, as colleges do, but thy do review applications.
This is old news…
The point of this new article is, hopefully, to help some applicants understand that the goal is to make the school want you. Tuition discounting is well know, but there are ways to get that price in range.
Someone should ask JCP how that whole “one low price, no discounts” thing worked out for them…
Saturn had the same problem.
Typo/autocorrect above (sorry). Should say Tuition discounting is well known.
Many schools have their own department of enrollment management, who work in conjunction with the admissions staff to shape a class to meet diversity, academic and other goals. They want to target students who meet certain admissions criteria and customize recruiting efforts to their individual (school) preferences. They want to identify who will be a good or needed member of their academic and social community, succeed in school, graduate and become supportive alums. They use predictive models to forecast from the pool of applicants, who is likely to enroll if admitted.
Finances drive many aspects of the college admission process, not only in the costs of tuition and fees from the parents’ side, (what can/will a parent/student pay) but also from the school’s side. Financial aid optimization refers to their identifying the best balance of tuition revenue forecasting with what need-based aid , merit money or other institutional aid in the form of tuition discounting they will need to offer a student they want. Schools are finding that as students become more savvy and the competition across schools more fierce, discount rates will continue to climb. But, financial/enrollment management companies work with/for colleges, use analyses that help set merit- and need-based grant targets by applying a statistical, econometric model to determine the price responsiveness of admitted students relative to their academic preparation and financial need. What that means is- they can determine how much aid to offer a student to get them to enroll. Big data is a big player in all this. Times have changed since we parents went to college.
Did anyone else get the vibe from this article that merit aid was “bad” and some how taking away from need based aid which is “good” or am I reading too much into this?
I don’t care what they call it. I had a spread sheet and any college that came in over our limit was out.
@3scoutsmom - yes, definately a vibe that “merit” aid should be renamed as “tuition discounting” and that it is not as good a use of institutional funds as need-based aid. As a family that was determined to have no need…but still needed help meeting college costs we were very happy with all the merit aid that was offered to my daughter. Don’t care what it is called.
As a prior poster alluded, there have been several instances where schools tried a lower tuition with fewer scholarships, then changed to a higher tuition with more scholarships, in both cases designed to keep net gross revenue from tuition remaining flat. They all found that it generated more applications and higher-stat students to use the latter model over the former. I hate the system personally, but it is hard to argue with what seems to work.
Agree that it doesn’t matter what they call it, but merit scholarships are one form of tuition discounting.