Tuition Discounts Increase in Popularity

Hungry for the brightest students, many of the country's stronger universities are actively discounting tuition. And it's the high achievers, rather than the needy students, who are getting a good chunk of the money. The practice is remarkably widespread, reaching almost all but the 30 or so Ivy and other elite colleges that ban merit-based financial aid. Schools are also becoming more aggressive in promoting their discounts. At the DePauw University Website, enter an SAT or ACT score, gradepoint average and class rank, and a computer program immediately tells you what kind of " award". Only " the real unlucky" pay full price any more, says Kenneth Redd, director of research at the National Association of Student Financial Aid

Administrators.About 76％ of first-year students got some form of discount this year at 331 private schools polled annually by the National Association of College and University Business Officers. Average award per student: ＄ 7,000. At small schools with tuition under about ＄ 20,000, the average discount is even higher, with some schools returning over half their tuition revenue.
Carnegie Mellon even tells students it will " negotiate" and perhaps match financial-aid packages if kids are offered bigger awards at other schools. Much as banks and insurers offer special rates to their best customers, schools are giving the biggest breaks to their top students. Public four-year colleges, too, are offering discounts.
The flip side of big discounts is that less money is available to improve academic programs and keep school infrastructure up to date. Mr. Redd says he found that universities that have sharply increased their tuition discount rates have seen graduation rates fall, and that's true even among highly selective schools. " They get the students in the door, but don't have the services to keep them," he says.
Wallstreet Journal