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Australia’s Universities Considering Tuition Discounting

Australia’s Universities Considering Tuition Discounting

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479487133An article in Inside Higher Ed discusses the efforts by the Australian government to deregulate tuition and fees by 2016 and the potential consequences for students if that occurs. Naturally, the discussion leads to tuition discounting as it exists in the United States. The writer references a July 2014 survey by the National Association of College and University Business Officers (NACUBO) that finds that among 401 nonprofit colleges and universities, nearly 90 percent of the freshmen class were receiving grants equivalent to nearly a 50 percent discount on tuition.

Tuition discounting originated in the United States as a clever way for universities to improve the quality of their freshman class by offering grants to encourage better students to enroll. The early adopters were successful and their success spawned the adoption of tuition discounting. The term was used since these were unfunded grants that resulted in a lesser amount of tuition collected from the student recipient. This differs from a funded scholarship which is disbursed through an endowment fund and transfers to the university to pay for the amount of the award. The practice became so widespread that only the elite private nonprofits are able to maintain a discount rate of less than 30 percent, and savvy parents are able to compare offers between schools based on the grants offered.

Critics of the Australian proposal state that it will lead to widespread differences in rates paid by students and their families. They propose that universities be transparent about the amount of discounts offered, but those interviewed in the article are not optimistic that transparency will readily occur. It is my assumption that Australian parents and students do not have access to a data source like the U.S. Department of Education’s College Navigator. Using College Navigator, a parent or student can search the name of the college that they’re interested in attending and click on the financial aid section. Type of aid is detailed between federal and state grants as well as institutional grants. Using McDaniel College as an example, you can see that 99 percent of the freshmen enrolling in the 2012 to 2013 year received an average institutional grant of $21,570 for an average net price of $21,856. Obviously, only a handful of McDaniel students weren’t offered a grant as part of their admission package.

I believe the transparency offered by the College Navigator website provides smart shoppers with the information they need to keep their college costs as low as possible for the institution of interest. I also believe that word travels and that College Navigator’s data instigates a broader percentage of students receiving grants than if the college or university didn’t have to publish the data. If Australia’s government succeeds in deregulating tuition and fees, academic institutions should be prepared for the eventuality that tuition discounting will be implemented and utilized by all of the institutions that have to compete for students. The only other question will be—how long will it take for them to reach nearly 50 percent tuition discounts as the July NACUBO survey indicates? Only time will tell.

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Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President and Chief Financial Officer in 2002. In July 2016, he retired as APUS president and continued as CEO of APEI. In September 2017, he was reappointed APUS president after the resignation of Dr. Karan Powell. In September 2019, Angela Selden was named CEO of APEI, succeeding Dr. Boston who will remain APUS president until his planned retirement in June 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. During his tenure, APUS grew to over 100,000 students, 200 degree and certificate programs, and approximately 90,000 alumni. In addition to his service as a board member of APUS and APEI, Dr. Boston is a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA), a member of the Board of Overseers of the University of Pennsylvania’s Graduate School of Education, a board member of the Presidents’ Forum, and a board member of Hondros College of Nursing and Fidelis, Inc. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. Dr. Boston lives in Owings Mills, MD with his wife Sharon and their two daughters.

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