The high cost of college is not only an issue for families and students but for colleges as well, especially nonprofit colleges that are not among the 100 or so elite institutions in the country.
These institutions are having a harder time attracting students because of their high sticker price, so they offer increasingly generous financial aid packages, including merit-based packages, and add infrastructure and amenities, but both squeeze revenues. In addition, there’s the constant competition from cheaper public colleges and universities, which is growing as more of those institutions introduce free tuition or other discount programs.
The average annual cost for a public four-year college, including tuition, fees and room and board, is $20,090 for the 2016-2017 school year, less than half the $45,370 cost for a nonprofit four-year college, according to the College Board.
(Related: How American Families Pay for College: 2017)
That’s the sticker price, but many schools offer discounts to attract students. The average discount rate offered by 411 small nonprofit colleges for the 2016-2017 academic year was 44.2%, according to the National Association of College and University Business Offices.
That’s good news for families and students who paid the discounted price, but it doesn’t bode well for the future for schools and students, including those receiving merit aid.
“We’re at a price tipping point and we need to be able to think of solutions,” says Sarah Flanagan, vice president for government relations and policy development at the National Association of Independent Colleges and Universities (NAICU). “Schools can’t make ends meet. Many families can’t either.”