IHE: The Discount Rate and Net Revenue

[polly_mer]

An article in IHE has a very readable discussion on why net revenue is a more important budgeting reality than discount rate: https://www.insidehighered.com/views/2019/08/14/why-discount-rate-flawed-statistic-tracking-college-finances-opinion

[spork]

I agree that the discount rate is meaningless by itself. In the market segment my employer operates in, discount rates are generally 50-55%.

My preferred measurement is operational expenses per FTE student over time.

[Hibush]

I agree that the discount rate is meaningless by itself. In the market segment my employer operates in, discount rates are generally 50-55%.

My preferred measurement is operational expenses per FTE student over time.

The article author compares that value with the revenue side also, net tuition per FTE.

For a whole lot of private schools, the sticker price is in a fairly narrow range (~$55k for AY19-20). Comparing discount rates among those schools amounts to comparing net tuition.

The discount rate's existence used to be a big secret, never mind the actual value. Now it has become one of the most widely available stats.