Just how hard is it to win a college scholarship?
Not very, it turns out. Indeed, the odds are downright excellent if your child applies to most private colleges and universities.
The share of freshmen who get a scholarships or grant has reached an historic high, according to the latest annual survey by the National Association of College and University Business Officers (NACUBO). During the 2012-2013 admission season, nearly 89 percent of freshmen at private four-year institutions managed to win awards. The percentage of students receiving these price breaks has consistently grown in recent years.
It's not only the number of students receiving these awards at non-profit colleges that is on the rise -- so too is the size of these tuition discounts. The average scholarship is now slashing 53.5 percent off the published tuition price. In comparison, in 2013 NACUBO reported an average tuition discount of 52.3 percent, up from 48.5 percent in 2009. The latest price cut represents an historic high.
What does a 53.5 percent price break come to in dollars and cents? For a school charging annual tuition of $40,000, such an award would shrink the tab to $18,600.
Despite the larger awards, the study found that nearly 48 percent of academic institutions around the U.S. reported that they had experienced a decline in freshmen enrollment, or no increase from the year before. Small schools, which the study defined as having student populations of under 4,000, suffered the most. Research universities, which include most of the nation's best-known institutions, were impacted the least. Just 7.5 percent of the institutions that experienced an enrollment drop were research universities.
A major reason why colleges are resorting to price cuts is because most families can't afford the sticker prices. Schools need to cut the price to attract enough students, and dispensing "merit" awards makes families feel better than just freezing or reducing the published prices.
In the survey, schools with declining enrollment said "price sensitivity" was their biggest issue, followed by increasing competition among their peers and a smaller pool of traditional college-going students.
While the vast majority of schools award merit scholarships, the highest-ranked private research universities offer few, if any, merit awards. The Ivy League institutions, for instance, don't award merit scholarships because they don't need to use this carrot to attract applicants. Many other schools near the top of U.S. News & World Report rankings don't either because they are so popular.