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Increase enrollment by changing quantity demanded
- When an institution discounts its tuition, it seeks to increase enrollment by changing quantity demanded. However, this is not accomplished by reducing the posted price for all students enrolled. The net, or transaction, price is not the same for every student.
www.sciencedirect.com/science/article/pii/S0272775700000534
Apr 22, 2024 · When accounting for discounts and scholarships in educational institutions, it is imperative to accurately report the impact of these financial aids on tuition revenue and ensure that revenue recognition aligns with the delivery of educational services.
Aug 31, 2015 · Most of the funds used to discount come from tuition that essentially reduces the net revenue to the institution. So a real world example: A university has a sticker tuition price of $25,000 and offers a student a scholarship of $6,250.
- Relationship Between Profitability and Tuition Discounting
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- Tuition Discounting and College Achievements
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- Tuition Discounting and College Reputation, Out-Of-Sample Tests
We begin our formal regression analyses with an exploration of the relationship between tuition discounting and an institution’s immediate short-term profitability. In Table 2, we present the results with the three annual profitability measures Operating Surplus, Profit Margin, and Revenue Growth as dependent variables. We estimate the regression e...
As we note before, there is some likelihood that the independent variables we use could be correlated with the error term. If such a statistically significant correlation exists, then the regression estimates would not give an indication of the directionality of the relationship. That is, we would not be able to conclude whether Discount affects Op...
In this section, we present our regression estimates where we explore the relationship between tuition discounting and various measures of student attraction, retention, and student quality. Specifically, we look at five different variables—Yield, Retention, GraduationRate, TransferOut, and SAT75. The results are presented in Table 4. The regressio...
To further understand the financial health of the institutions, we study the effects of tuition discounting on various measures of financial stability and risks of the universities. We specially consider the level of debt, equity ratio, liquidity, and total asset turnover. A higher level of debt is associated with a greater probability of default (...
To understand how tuition discounting affects a college’s reputation, we devise a set of out-of-sample tests. In this process, we split our sample into two roughly half time periods. The dependent variable USNewsRank is computed as % increase in U.S. News and World Report annual national university ranking for the college over the period 2010 and 2...
- Abu Jalal, Shahriar Khaksari
- 2019
Tuition discounting is the practice of offering scholarships and grants to offset the sticker price of attending colleges and universities. The fact that the average discount rate is 50% across the country (Caskey, 2018) indicates how widespread the practice is.
Defining Tuition Discounting Tuition discounts have several components. The largest component is general institutional grant aid, which may be allocated either on the basis of financial circumstances or according to other criteria. Some of this aid is funded through restricted endowment income or restricted gifts. However, much of the aid is
Oct 16, 2023 · NTR, obtained by deducting tuition discounts from gross tuition, provides a more accurate indicator of the funds received to cover operating costs. Tuition and financial aid are key areas at the intersection of long-term school financial health with accessibility and affordability for the community the mission serves.
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Jul 16, 2011 · 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.
