Brookings Institute says discounts on tuition would actually make college more expensive.

As COVID-19 continues and disrupts the college education process, students and parents have been pushing universities for discounts on tuition, which some universities have conceded to offer, according to an article from Brookings Institution.

Discounts may actually be harmful to students, because at most schools without significant endowments, tuition discounts may reduce the availability of financial aid to those who need it in the future.

It’s a fact that most students need financial assistance from sources outside the family to be able to pay for college. In the 2017-18, 86% of first-time undergraduates at four-year institutions obtained aid of some form.

Universities calculate how much each student’s family can afford to pay for annual tuition and then attempt to make up the difference with aid. For example, a student from a household with an annual income of $100,000 might be estimated to be able to afford$10,000 a year toward tuition. If that tuition is $50,000, the remaining $40,000 would be subsidized through grants and federal work-study. 

However, at many universities, financial aid packages also include federal student loans or even loans to be taken out by parents. If the student in the above example receives a 10% percent discount and now has an annual tuition of $45,000, the student may still be expected to contribute $10,000,the same cost even without the tuition discount. Nothing has changed except now financial aid is covering$35,000 instead of $40,000.

It might seem helpful to offer discounts on tuition to families that are struggling from the economic impacts of the pandemic, but this is counterproductive.Universities will receive less revenue to redistribute as aid in the future to students in need.

Some schools have recognized this problem and decided to apply tuition discounts to students’ expected financial contribution. For example, The Catholic University of America has instituted a 10% discount on the difference between the tuition price and students’ scholarships and grants from the university. 

Many universities are projecting shortfalls of tens to hundreds of millions of dollars because their operating costs have not decreased and instead have actually increased as a result of operating during the pandemic. Costly coronavirus prevention measures such as coronavirus tests, adapting classrooms for social distancing, paying for technology to enable virtual learning have increased operating costs. 

Some universities are actually borrowing funds and cutting budgets not related to financial aid in an effort to increase financial aid available to students whose families suffered job losses. 

As operating costs increase and revenues decrease, money available for financial aid will likely go down in the future, when current debts become due and unsustainable cuts are reversed. 

In recent years, some have argued that the best way to make college more affordable for financially struggling families is to actually increase the cost of tuition and using the added revenue to increase available financial aid. 

Most students not paying full tuition usually pay only as much as the federal government has calculated they reasonably can with information gathered from the Free Application for Federal Student Aid (FAFSA). Students whose households can afford to pay sticker price would not be as financially impacted by the cost of tuition and indeed, usually their families could afford to pay more, but they don’t have to because the university puts a ceiling on tuition.

There are many things universities can do to help financially struggling students during the pandemic.

At some universities, the members of the academic leadership have made substantial donations to assistance funds to support students and staff.

More universities should expand understanding about federal aid. Every year, approximately 40% of students don’t complete the FAFSA and as a result, billions in financial aid goes unclaimed along with state aid and private scholarships.

Universities should more widely publicize what students from different economic divisions will actually for tuition once aid is calculated. Too often, potential applicants are scared off by the sticker price of tuition,without giving thought to what financial aid would cover.

Alumni should be asked to contribute more. The generosity of graduates should not be underestimated. Alumni nationwide donate hundreds of millions to their alma mater.

It is reasonable to seek to make higher education more affordable during a time when many families are struggling to afford the costs of tuition, but tuition discounts would actually have the opposite effect, putting higher education further out of reach of students in need.