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Why Does College Cost So Much?$
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Robert B. Archibald and David H. Feldman

Print publication date: 2010

Print ISBN-13: 9780199744503

Published to Oxford Scholarship Online: January 2011

DOI: 10.1093/acprof:oso/9780199744503.001.0001

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List-Price Tuition and Institutional Grants

List-Price Tuition and Institutional Grants

(p.150) 10 List-Price Tuition and Institutional Grants
Why Does College Cost So Much?

Robert B. Archibald

David H. Feldman

Oxford University Press

Increasingly, colleges and universities are using institutional grants as a means of discounting tuition for students they would like to attract. For any given cost per student, this discounting must raise list-price tuition. The chapter explores the reasons for the increased use of institutional grants found in the data for all types of institutions. For selective institutions, crafting the right first year class is important, and discounting allows them to target individuals and groups to create a balanced incoming class. But the chapter also concludes that there is an arms race in institutional grants. A significant part of the increase in list-price tuition results from this arms race. Barring exemptions from federal anti-trust law, the arms race is unlikely to stop.

Keywords:   antitrust laws, arms race, institutional grants, list-price tuition, tuition discounting

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