Discounting Keeps Climbing

Stephen Burd was quoted in Inside Higher Ed on how private and public colleges are using merit aid to attract qualified, wealthy students.

As more institutions raise sticker prices, the share of students with financial need will likely rise, the report says. Therefore, more students will need aid before they can enroll, and students will care little whether grant dollars are classified as need based or non-need based, it says.

Many would disagree with that assessment, including Stephen Burd, a senior policy analyst with the Education Policy program at New America. Lumping non-need-based aid going to financially needy students with need-based aid is putting a positive spin on the way rising discounting and higher sticker prices affect students, he said in an email.

“It's important to point out that at expensive private colleges, fairly well-to-do students can have some financial need because the prices are so high,” he said. “So just saying that the money is going to students with financial need is a bit misleading. In other words, students who come from families making $100,000 or more a year may show need when attending colleges that have a total yearly cost of attendance of $70,000 (including tuition and room and board, which most four-year private college students pay).”