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To woo students, colleges may offer tuition discounts


HOUSTON — Selecting a college these days is a lot like buying a car. The sticker price students see in the brochure often isn’t what they will pay.

Many public and private schools use tuition discounts to woo students who are unable, or unwilling to pay the full price. These discounts come in the form of institutional grants and scholarships that offset published tuition and fees. As a result, students at the same institution can end up paying different amounts depending on their financial situation, academic standing, or athletic ability.

College affordability is just one of the motives behind discounting, which began with private schools in the 1970s. Depending on their mission, some institutions use it to attract specific students, to shape their incoming class in terms of demographics, or to boost enrollment.


‘‘We discount because we have a commitment to affordability and to diversity in income and background,’’ said Kathy Collins, Rice University’s vice president of finance. ‘‘Students may think we’re too expensive, when we’re less expensive than a state school because of how generous we are.’’

Private institutions like Rice generally are more generous with discounts than public ones. Last year, the average tuition discount rate for full-time freshmen at private schools rose to a record 45 percent, marking the sixth consecutive annual rate increase, according to a survey by the National Association of College and University Business Officers.

The discount rate is slightly higher at private institutions in the Houston area. At Rice University, it’s about 48 percent. The sticker price at Rice this year is $38,941. When the average tuition discount is applied, a student would pay $18,691.

As institutional aid has grown over the past five years, increases in the average published tuition-and-fee rates at private schools have slowed. This year, private institutions had the lowest published tuition-and-fee rate increase, 3.6 percent, in four decades, according to a National Association of Independent Colleges and Universities survey.


However, net prices at private schools have gone up about 8 percent this year, to an estimated $12,460 from $11,550 in 2011-12, according to College Board data.

Public institutions have experienced a similar trend. This year, they posted the smallest published price increase — 2.9 percent — in three decades, the College Board said.

The net price, however, has increased by 60 percent — from $1,940 in 2009-10 to about $3,120 as federal aid has declined. The study used different time frames for public and private institutions.

Rice awards institutional aid to 58 percent of its freshmen. The university has a need-blind admission policy, meaning it doesn’t consider an applicant’s financial situation for admission.

Rice officials determine what the family and student can contribute, then subtract that amount from the full cost of attendance to calculate the unmet need. The university covers 100 percent of the unmet need with a combination of institutional grant aid, federal and state aid, subsidized loans and work-study (loans and work study are not included in tuition discounts).

For families with incomes less than $80,000, the university provides institutional grants rather than loans. This year, about 80 percent of Rice freshmen with family incomes less than $80,000 received institutional aid.