4 Facts about Tuition Discounting

Since nobody wants to graduate with a lot of debt, college costs can play an important role in the college selection process. Tuition discounting is a common practice used by institutions (colleges and universities) to decrease costs and attract students.

  1. Tuition discounting represents the amount of grants and scholarships that a student gets but does not have to repay it back. The main source for these discounts is institutional aid (the institution’s funds). Applying for other scholarships can help boost the discounting amount, but the largest amount of funds would typically come from the institution.
  2. Tuition discounting tends to be highest for freshmen students. In other words, freshman students are the ones that will be the recipients of the largest amount of grants and scholarships as compared with transfer students.
  3. The tuition discounting packet can change over time. Grants and/or scholarships (discounts) can be awarded in the form of merit aid — for students with high scores and/or GPAs –, need based aid — for students meeting certain requirements in terms of financial background –, and in some cases a combination of merit and need based aid. However, meeting eligibility criteria can be difficult over time. For example, meeting a certain GPA threshold can be difficult especially when switching from high school standards to college standards (my first semester in college was the hardest one) and this can impact eligibility for merit aid. Additionally, changes in the financial background such as a parent getting a better paying job, getting married, can occur and impact eligibility for need based aid.
  4. Almost all the costs associated with college may increase every year and the discounting package typically does not cover these increases. Therefore, when the college costs are a several tens of thousands of dollars a 1–3% increase in tuition, fees, cost-of-living, etc. annually or biennially can add up.