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Confusion in terminology comes when discussing the forms of financial aid known as tuition discounts and waivers. Some people consider these to be strictly the financial aid offered based on eligibility. Others define tuition discounts as including anything offered by the college that reduces the amount a student is required to pay for tuition. In this article, both eligibility-based discounts and other forms of tuition reductions are discussed.

When you're offered a tuition discount, the college quotes you its full sticker price and then offers to reduce the amount for you. The reduction may be a specific dollar amount of money or a percentage of the total.

You never get to see or hold the money when you receive a tuition discount. Your college bill is simply reduced by the discount amount so that you only have to pay the net amount.

Tuition discounts, by definition, only cover tuition. Some colleges may extend the discount to other required fees, such as lab fees, but this is rare and must be confirmed in advance.

For instance, if you've budgeted $30,000 per year to attend a particular college, including tuition, residence, meal plan, books, and other costs, and you get a "30 percent tuition discount," don't expect to get $9,000 off the top. If $15,000 of the total cost is for tuition, a 30 percent tuition discount reduces your cost by $4,500. You'll still have to cover the remaining $10,500 in tuition plus the entire $15,000 for other expenses each year.

You may be wondering why colleges would even offer you a discount. Well, here are the two main reasons:

  • You're eligible due to family, employment, religious, or other association, and everyone who's eligible gets offered a tuition discount.
  • The college admissions officers want to give you a specific incentive to attend their college because they consider you to be special, valuable, and worth spending a little more money to win over.

The money the college offers you may be called a tuition discount, an entrance award, or a specific college-based grant, but the effect is the same: The amount you have to pay is less than the quoted sticker price.

There are no instances of state colleges offering the second type of tuition discount because tuition is kept relatively low for students residing in that state. State taxes subsidize state colleges, so prices are much lower for those living there, and state colleges rarely need to beef up enrollment numbers through incentives. In contrast, certain higher-priced private colleges frequently offer tuition discounts to the students they want. Interestingly, Ivy League colleges have a set policy that all financial aid they offer is need-based (that is, available only to people who can't otherwise afford college).

Eligibility-based tuition discounts

Colleges often offer to reduce tuition as part of a benefits package or as part of their general policy. For this sort of tuition discount, you can't negotiate for a better deal, and eligibility tends to be strictly defined. You either qualify or you don't. Here are a few examples:

  • College employees often get tuition discounts. If you're the spouse, child, or (rarely) grandchild of a faculty or staff member, you're often entitled to a tuition discount or a tuition exemption.
  • Some colleges also offer discounts to alumni and their dependents. Colleges often do this as a way of keeping a tradition alive or rewarding return business. Stanford University, for example, offers a 20 percent tuition discount to alumni returning for Continuing Education courses.
  • Eligibility may be based on age. Some colleges offer discounts to seniors. Tulane University, for example, offers a 50 percent discount for students aged 60 years and older.
  • Discounts may be offered to students with siblings attending the college. Seton Hall University, for example, offers a 10 percent discount to students whose brother or sister attends SHU.
  • Tuition discounts are often tied to employment. George Washington University in Virginia operates liaison programs with various corporations, offering a 10 percent tuition reimbursement to employees who complete a course of study with them. Like many similar programs, the reimbursement amount is capped at a set figure. In GWU's case, the maximum that can be claimed is $1,000 per year per student.
  • Some employee tuition discount programs also apply to the rest of the family. The State of Tennessee offers employees of the executive, judicial, and legislative branches of government a fee waiver for one course per semester, and tuition discounts of 25 percent on all college courses taken by their dependents. Specific restrictions apply — generally the dependant must be under 24 — but they're easy to follow.
    Programs for state employees and their dependents exist in most states, so definitely investigate this possibility if your parent, or even your grandparent, works for (or used to work for) the state. While you're at it, don't forget to check on discounts available if your parent works for the city in which a college is located.
  • Some programs are tied to religious institutions or organizations. At Rosedale Bible College, active ministers and their dependents are offered a 75 percent tuition discount if they're members of the Conservative Mennonite Conference. Ministers outside the Conference receive only a 25 percent discount, and the rate for their dependents falls to 15 percent. Also, several other religious institutions offer discounts to groups.
  • Some tuition discount programs may not be for college tuition. Instead, discounts for a private school, a daycare, or other similar institution may be offered to the children of those attending or working at a particular college. For example, Children's World Learning Centers offers Johns Hopkins University employees a 10 percent tuition discount on published tuition rates at any of the Children's World Centers.
  • Some discounts are offered for non-peak school times. Pennsylvania College of Technology has initiated an Early Start program, offering students a 25 percent tuition discount on specific courses if they take them in the summer term, which typically has lower enrollment than the rest of the year.

Incentive-based tuition discounts

Some colleges use these incentives to meet their enrollment objectives of increasing the quality or diversity of students, or to ensure that they acquire a sufficient number of students for the year. The effect for you, the student, is that the college offers you a discount to register with it. In effect, the college waives all or a portion of your fee because it believes that you'll make a significant contribution to the college environment.

The college itself funds this amount through internal budgets, endowment funds, and income. Generally, a certain amount is set aside in the college admissions budget for these incentives. You can try to negotiate for a better financial aid package or ask for the financial aid officer to work with you to obtain extra financing through other sources.

To make the terminology even more confusing, sometimes this discount is also known as an entrance scholarship. If you receive one, take special note of whether or not the award is recurring or renewable. Many entrance scholarships only apply to your first year. Then, after you're a registered student, happy at the college with friends and enjoying an established relationship with your professors, the amount you must pay in subsequent years effectively rises dramatically.

About This Article

This article is from the book:

About the book authors:

David Rosen is a management consultant, writer, and teacher.

Caryn Mladen is a consultant, writer, educator, and lawyer.

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