Pricing Differences Among Private Colleges: The Impact of Discounting Through College-Funded Grants

Substantial differences in discounting exist among private, not-for-profit, four-year colleges. Such differences must be considered to provide an accurate characterization of the actual differences among colleges in pricing. Differences across colleges in discounting appear related to differences in admissions selectivity, nominal price, endowment per student, and regional location. For those who admire how very selective, high price colleges offer substantial aid packages to needy accepted students and ignore need in their admissions decisions, there is a challenging irony. One reason many of these colleges can sustain such policies is that stringent selectivity and high price may lower the percentage of needy students