Lexington, KY - Several months ago, a letter arrived from a local seafood restaurant, offering $25 toward our next meal there. Weeks later, an invitation to a gathering at a well-known traditional women's clothing store arrived, promising 20 percent off any purchase made at that event. Just a few days ago at a professional meeting in North Carolina, the parallel practices of the world of higher education, where discounting carries alternate names, hit home for me: merit scholarships, honorary scholarships and need-based financial aid are in expansion mode.
Tuition discounting is not a new concept: need-based financial assistance has cut the sticker price of college for millions of students. A small number of colleges, including Kentucky's own Berea College, specialize in educating students from low-income backgrounds and enabling them to graduate without debt. Some prominent colleges with sizable endowments and applicant pools have followed this example in recent years, replacing the loan component of their financial aid packages with outright grant funding, drawing more candidates than ever before.
News from the front
Back to the professional meeting: a panel of admission officers shared tales of changes wrought by today's economic climate. The director of admissions at UNC-Charlotte, a large, comprehensive, public university, reported enrolling 800 or so more students this fall than last fall. Yet due to diminished state appropriations and students' diminished ability to pay full cost, revenue declined. Budgets and staff had to be cut across campus. Sections of the required freshman composition course could not stretch far enough to accommodate everybody, so many students will have to find another way or another time to take the course. Imagine this scenario replicated in other departments on campus and soon you may see students needing five or six years to meet graduation requirements normally completed in four years.
College of Wooster, a small liberal arts college in Ohio, enrolled fewer students this fall than planned and budgeted for. The college has not eliminated any faculty but has closed a dining hall and reduced budgets by 10 percent across the campus. Over 90 percent of entering students received merit or need-based financial aid. The vice president for enrollment is thinking strategically about the entering class for Fall 2010 and predicts that many private colleges may accept higher proportions of early decision candidates this year to have greater certainty about the size of next fall's entering class.
Vanderbilt University joined the small group of private, selective universities eliminating loans from need-based financial aid packages last year. The associate director of admissions indicated that Vanderbilt received a greater number of requests for financial aid when this policy was implemented, but the increase did not match their expectations. This year, Vanderbilt's early decision applications are running slightly ahead of last year's figures.
What happened more broadly in 2009?
According to results of a survey published by the National Association for College Admission Counseling (NACAC) regarding effects of the economy on the admission process, almost 90 percent of colleges responding to the survey reported an increase in financial aid applications from students who entered this fall. Financial aid packages were larger, and more students received them. Many colleges accepted larger numbers of applicants, anticipating lower yield on offers of admission. Indeed, 44 percent of colleges experienced lower yield. A little more than one-fifth of responding institutions indicated greater use of wait lists and willingness to extend enrollment deposit deadlines. In other words, colleges are negotiating on financial and other details with prospective matriculants.
What will 2010 bring?
Topping Vanderbilt's early decision pool increase, Duke University recently reported a 33 percent increase in the number of early decision applications received compared to last year, surprising some in this period of economic uncertainty. The best-known schools with ample resources are not likely to have to change admission or scholarship policies, but the climate is changing for most others.
Just as local stores and restaurants are providing incentives for us to shop and dine with them, so too are most colleges providing incentives for enrollment. Students from middle-income families are well advised to apply to private colleges outside of the "top 25," as there is aggressive competition for students. The published cost of attendance may not be anything like the price you will actually pay, so don't be afraid to explore college options with seemingly higher price tags. Perhaps a discount will be offered at the register.
Jane S. Shropshire guides students and families through the college search process and is Business Lexington's Higher Ed Matters columnist. Contact her at Jshrop@att.net.