Fall 2016 issue of Horizons
Average Institutional Tuition Discount Rate
2010 – 11
2011 – 12
2012 – 13
2013 – 14
2014 – 15
2015 – 16
2009 – 10
Source: 2015 NACUBO Tuition Discounting Study, various years. Data as of fall of each academic year.
These population trends have placed a significant amount of pressure on traditional colleges and universities to maintain or increase their enrollment rates. Therefore, as a correlated result, the amount to which institutions are discounting their tuition and fees has risen substantially. The National Association of College & University Business Officers conducted a study of tuition discounting in 2015 and found that average discount rates increased for first time freshman to 48.6% in 2015-16, compared to 44.3% in 2011-12. Endowments Another key factor in the overall economic picture for an institution of higher education is the size and ability to utilize an endowment to help support operations. The recent NACUBO-Commonfund Study of Endowments ® (NCSE) indicated that institutions are more heavily relying on their endowments, despite a decline in overall investment returns.
The study determined that the most recent 10-year return on endowments declined to 6.3%, which is a rate well below the target return rate used by most endowments to maintain their spending power. Despite this decline, 78.0% of the respondents to the survey reported spending more from their endowments in the current year. Focus on Retention On the positive side, there are some emerging trends indicating that these financial pressures on institutions are helping with overall outcomes. Many institutions have made student retention a priority. While this has yet to impact overall graduation rates, data published by the Department of Education reported that retention of first time students increased from 71.0% in 2006 to 73.9% in 2014.
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