2/27/17 1 Understanding and Controlling Your Discount Rate John W. Dysart President The Dysart Group Real Challenges for Business Officers Discounting Greatly Influences Operating Budget Enrollment Officers Often Request Additional Resources Everyone Believes They Have Valid Opinions Pressure from Cabinet and President Concern of Board Members An Essential Truth Everyone has an opinion about your tuition discounting, everyone wants to discuss it, but virtually no one really understands it. A basic understanding of the definition, influencers and opportunities is critical. The education of various constituent groups is essential.
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When calculating your discount rate, do you count tuition waivers and remission as part of your institutional financial aid. Conversely, do you count the tuition dollars from students receiving tuition waivers and remission as part of your tuition and fee revenue?
We currently put in both the expense and the revenue for waivers so it washes out. We like to keep track of the count within our modeling, so that's why we include it even though it doesn't impact the calculation of discount rate.
We count all undergraduate tuition revenue. We do not include remission of tuition benefits or waivers as financial aid scholarships.
We do not count tuition remission in either discount or revenue since it is an employee benefit. We don't have tuition waivers per se, but we do have Tuition Exchange, which we do count in discount.
Our remission and waivers are out of a different HR budget, so we do not include their aid or revenue in the calculation of our DR for scholarship/grant purposes. We feel that it inaccurately reflects the DR when they are included in the numbers and choose to exclude it.
While enrollment managers and business officers are generally held accountable for discount rates, many of the factors that ultimately determine discount rates are outside of their control.
Does Not Change Out-of-Pocket Expenses for Families
Financially Dangerous
Most Colleges Increase Tuition Back to ”Normal” Levels within 3-5 Years
Reductions
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Limited Impact on Enrollment
Administrative Nightmare for Billing, Financial Aid Budgets and Grade Levels
Restricts Institutional Flexibility to Address Changing Market Forces◦ State Grant Reductions◦ Federal Aid Reductions◦ Increased Energy or Health Insurance Costs◦ Economic Downturns◦ Fund-Raising Challenges
Financially Dangerous
Four Year Guarantees
Opportunities for Good Press
Nominal Financial Risk
Restricts Institutional Flexibility to Address Changing Market Forces
Can Be Reconsidered Every Year Based Upon Market Conditions, Enrollment, Financial Aid and Net Revenue
Opportunities for Multiple Years of Positive Public Relations
One Year Freezes
Maximizes Flexibility
Considers Budget Realities and Reasonable Financial Needs
Less Focus on Competitors
Can Be Reconsidered Every Year Based Upon Market Conditions, Enrollment, Financial Aid and Net Revenue