College Costs: Beyond The Sticker Price

Notre Dame University's "Golden Dome"
Jonathan Daniel/Getty

The cost of college has gone through the roof in the past decade. You know this.

But the sticker price for a year of college is a lot different than what people actually pay — and private colleges have grown a bit more aggressive in offering discounts in recent years, according to a report out today from the College Board.

Colleges don't call them discounts; that wouldn't go with the whole august, wood-paneled, collegey vibe. They call them scholarships, or grants.

The combination of higher prices and more scholarships can be good marketing. In an article today, U.S. News wrote: "College officials fear that Walmart-esque everyday low pricing would actually drive more applicants away because many students and parents assume that higher tuition prices mean a higher quality education."

Colleges do offer discounts for merit, for need, for jocks, etc. And you can calculate their discount rates by comparing how much colleges say it costs to attend, versus how much they actually collect. (Note that these are actually discounts — student loans count as part of what schools actually collect.)

For four-year private schools, the discount rate crept up from 28.6 percent in 2000-01, to 33.1 percent in 2008-09, according to the College Board.

The report compares the sticker price (the blue line in the graph below) with what the average student at the average private school actually plays (the orange line):

Two notes on the chart: The average student is something of a statistical fiction, of course, but it's a useful statistical fiction. And the chart doesn't include room and board.

Anyway. During the same time period, the discount rate at four-year public schools actually fell a bit, from 20.5 percent to 18.3 percent:

The decline seems to have hit funding based on merit, sports and the like. In 2000-01, 56 percent of grants and scholarships for public-school students went beyond meeting financial need; by 2007-08, that had fallen to 40 percent, according to the College Board.

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