Tuition discounting as a strategic tool in higher education

Tuition Discounting Practices

The educational systems of the Western World has seen great transformation and evolution over the past decades. The rapidly changing environment where technology, social, and political forces are represented signify that education leaders must address problems if they are to stay relevant and effective in their position. The purpose of this essay is to explore the practice of tuition discounting and present a comparative analysis on the benefits and drawbacks of this educational practice.

This essay will use data and empirical evidence to construct an argument which aims to separate the good qualities from the limiting qualities of this practice. The essay will argue that tuition discounting is merely a tool, that when applied, must take into account the purpose or intention of the school leadership itself. By exploring this tool or approach of tuition discounting, college presidents may be able to decipher the information and determine if this course of action is best for their respective school or environment. The essay will conclude with ideas on how to best synthesize these components and integrate them into a secondary educational setting in the best and most efficient manner.

Background

Tuition discounting has been practice for many years, but the recent educational landscape, where resources and funding has become of the highest priority, has seen the practice become more influential in present times. Despite this increased trend, tuition discounting is very simple process that is accomplished in many different ways according to the institution that is offering such a contract. "Tuition discounting is the practice of awarding institutionally-funded financial aid in the form of non-repayable grants and scholarships to students. Similar to state and federal grant programs, colleges provide aid to reduce the "sticker price" students pay for college. In 2008, students attending public four-year institutions received over $14 billion in grant and scholarship aid from federal, state, and institutional providers; campus-based aid programs accounted for approximately 33% of this total amount," (U.S. Department of Education, 2009).

The association between higher education and high costs cannot be ignored when trying to understand the need for tuition discounting. In America, the price of education is very expensive and very few young students can accomplish this mission without going into some form of debt. Federally granted student aid encourages this debt-based programs, where schools appear to need more and more funds to maintain a high level of curriculum educational programs. This social and political problem leaves the educational system in a bind at many levels and the need to bail out the government in the form of these modification programs seems necessary if not urgent.

Tuition discounts work in a very unique and applied fashion. The process starts with a published or offered price of tuition to the student. This is the sticker price of the cost of the education. Tuition discounts come in the form of aid, be it grants, donations, loans etc. This is essentially subsidizing the student's education with other resources that have more of a collective outlook and may not be focused on the students success per se, but the institutional success is held in a higher esteem.

Browning (2013) explained that along with added responsibilities that must be taken on when an institution used tuition discounting as a financial tool. She argued in her research article that "The relationship between tuition discounting and the financial stability of an institution has received little attention in the literature. Available research has examined tuition discounting trends, general differences between institutions, and the sustainability and viability of institutions, but not strictly the financial implications of various tuition discounting practices. Researchers may use financial indicators to explore the relationships between institutional financial position and various resource allocation decisions, such as debt burden, average tuition revenue per full-time equivalent student (FTE), instructional expenditures per FTE, or mean salary of full-time faculty. The versatility of financial indicators is limited only in how scholars choose to apply them in their research."

Analysis and Recommendations

Tuition discounting is much like a credit card. It can allow for temporary relief but at a price. The focus on continuing education needs to be more on quality then quantity. Educational institutions do not have to work at a profit in order to be successful. In a balanced and tempered environment, every penny would be spent and used with no left over or nothing owed. This standard is attainable when college and university presidents set out goals for their institution that are not based on financial gains and losses.

A return to a more non-profit posture is called for in today's education system. The collective is failing at many levels and students are wasting their time and resources on an education that is becoming lower quality compared to rest of the world. The need for education in the 21st century has been transformed by the need for monetary profits and controlling information. Students will eventually seek other avenues of approach for education when the system becomes untenable. That point in time is near as the impacts of tuition discounting have reached proportions that can no longer be managed with an honest approach.

Phasing out an relying on more traditional ways of funding education may be required in the future for college and university leadership. It is recommended that tuition discounting practices be minimized in order to reestablish a correct balance between the quality of education with quantitative financial issues which have clouded and impacted the environment in a destructive and limiting manner.