List-Price Tuition and Institutional Grants

Robert B. Archibald and David H. Feldman

in Why Does College Cost So Much?

Published in print October 2010 | ISBN: 9780199744503
Published online January 2011 | e-ISBN: 9780199866168 | DOI:
List-Price Tuition and Institutional Grants

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Increasingly, colleges and universities are using institutional grants as a means of discounting tuition for students they would like to attract. For any given cost per student, this discounting must raise list-price tuition. The chapter explores the reasons for the increased use of institutional grants found in the data for all types of institutions. For selective institutions, crafting the right first year class is important, and discounting allows them to target individuals and groups to create a balanced incoming class. But the chapter also concludes that there is an arms race in institutional grants. A significant part of the increase in list-price tuition results from this arms race. Barring exemptions from federal anti-trust law, the arms race is unlikely to stop.

Keywords: antitrust laws; arms race; institutional grants; list-price tuition; tuition discounting

Chapter.  8577 words.  Illustrated.

Subjects: Financial Markets

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