[{"_1":2,"_111":-5,"_112":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,75,87,99],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":72,"_74":72},"mediaId",6463750,"mediaKeyId","5785090-bf5256a9a7028f37fec785219dc3e7ca","parentId",5785090,"title","Witnesses describe ‘unfunded discounting’ as widespread pricing scheme that can leave students footing peers’ scholarships","audioSeconds",2763,"startMs",1492000,"endMs",4255000,"viewUrl","/Search/View?dp=1&key=5785090-bf5256a9a7028f37fec785219dc3e7ca&start=1492&end=4255","thumbnailUrl","https://assets.pipeline.soar.com/5785090-bf5256a9a7028f37fec785219dc3e7ca/thumbnail_1492000.jpg","articleUrl","/articles/6463750/Witnesses-describe-unfunded-discounting-as-widespread-pricing-scheme-that-can-leave-students-footing-peers-scholarships","mediaUrl","https://secure.pipeline.soar.com/6463750-f22d4ae6e2e2d1013906b49334acfcd0/orig.mp4?Expires=1773569655&Signature=GhGbg0Y1xScdsjpIkzKc-UNXqs-GSiLI3lhkXOBsNHk6V1CGvNZK4oDVI0Vu8TtiB2AkUF2BcTNiVGif1VAgxJdqGAShRuQDFVhmXpDDB13StKCY2k~d1dMVdyZDPdUMz8HHPgwCs-sPce1IU3del8bSJ03d1lp8tskY2sUA55D1lSGL9-s1brRE3VLHdoDkhLAGTli6qvsqTTRsqyc9qkS0nV3x0gYUgAv-0QLFUfn9jaU8AZWS2xQAuuuuCjFQQlN5cPY7oV7s5Q6RwR1RyveEIMd42RWQll2ZG~2vxotWZzI5ROm-pveQtYWZYRVkzGfe-DBVFzabAT0tIQmzeA__&Key-Pair-Id=KUT5TJCACFTXG","author","U.S. House Committee on Education & the Workforce","date","2025-09-17T04:30:19Z","article","At a House Education and Labor subcommittee hearing, witnesses described “unfunded discounting” — the practice of setting high tuition and then offering large institutional scholarships that are not directly funded — as a common pricing strategy that can leave some students effectively subsidizing others.

Lee Wishing, vice president for student recruitment and chief marketing officer at Grove City College, told the subcommittee that some institutions set sticker prices “well above their actual cost” and use the difference to offer large scholarships. “A university sets its sticker price at $65,000, but its actual break even cost to educate a student is only $35,000,” Wishing said. “Essentially, students who receive smaller scholarships are unknowingly subsidizing those who get larger ones.”

Wishing described the effect on students who receive smaller awards: they may borrow to cover the higher net price, carry excess debt and, if scholarships require maintaining minimum GPAs, risk losing aid and being forced to pay the inflated sticker price or to drop out.

Justin Draeger, senior vice president for affordability at Strada Education Foundation, said enrollment tactics and pricing opacity erode public trust and “work against the school’s interest” over time. Draeger emphasized the need for clear, early “all-in” price information and for institutions to change enrollment incentives that encourage price inflation.

Members pressed for more detail on the role of private consultants and enrollment-management firms. Representative Brian Fine and others described demonstrations in which data models predict the exact amount a student will pay and questioned the ethical implications. Wishing said these firms are “big name companies in the higher ed space” and that the models are widely used, calling the overall system “jaw dropping” when demonstrated.

Witnesses and members also noted that price discrimination relies on data the federal government collects via the FAFSA. Andrew Gillen, research fellow at the Cato Institute, said colleges can access detailed financial information about applicants and use it, along with the order in which students list schools on their FAFSA forms, to shape offers.

Committee members asked whether the practice is confined to private or faith-based schools; Wishing said it is “widely practiced” across institution types though not universal. He said Grove City does not practice unfunded discounting, charging what he described as a “break even price” and funding scholarships through endowment and donors.

Members and witnesses characterized the practice as a market-failure symptom that disproportionately harms middle-income, first-generation and low-income students who lack the resources to absorb surprises in net price.

Ending: Lawmakers and witnesses urged steps to reduce individualized price manipulation — including more transparent net-price disclosures and reforms to enrollment-management incentives — and signaled further congressional scrutiny of vendors and institutional pricing practices.","mediaType","Video","parentTitle","No More Surprises: Reforming College Pricing for Students and Families","oneSentenceSummary","At a House Education and Labor subcommittee hearing, witnesses described “unfunded discounting” — the practice of setting high tuition and then offering large institutional scholarships that are not directly funded — as a common pricing strategy that can leave some students effectively subsidizing others.","taxTitle","Education and Labor: House Committee, Standing Committees - House & Senate, Congressional Hearings Compilation, Legislative, Federal","taxId",1979,"location","","headline","shortSummary",{"_33":76,"_35":36,"_37":38,"_39":77,"_41":78,"_43":79,"_45":80,"_47":81,"_49":82,"_51":83,"_53":84,"_55":56,"_57":58,"_59":85,"_61":62,"_63":64,"_65":86,"_67":68,"_69":70,"_71":72,"_73":72,"_74":72},6463736,"Witnesses urge keeping gainful-employment and financial-value transparency rules to protect students from poor-value programs",140,2430000,2570000,"/Search/View?dp=1&key=5785090-bf5256a9a7028f37fec785219dc3e7ca&start=2430&end=2570","https://assets.pipeline.soar.com/5785090-bf5256a9a7028f37fec785219dc3e7ca/thumbnail_2430000.jpg","/articles/6463736/Witnesses-urge-keeping-gainful-employment-and-financial-value-transparency-rules-to-protect-students-from-poor-value-programs","https://secure.pipeline.soar.com/6463736-19db9e694e81615d1dae3554c5ccfab4/orig.mp4?Expires=1773569655&Signature=IMuzaXmw1XjDofjginNVADtfSFyesI7I46I5I87e4vL8vavYMSwvjL4ycyc~PUPgl5N1x64I-z96jrHeKgihcHer0aJjn-PVY6ABnfVleu4y9xB8vJ8nnvQUuU89cIfH-GUw3ycKeFpjLLWteesPToYWqJ8Dd2Hm3Uuox0OTvgxiEG7qQqhl0h5-JLGZH9BuLU7brE3SM-XXpcZ-GPu15dDlpXOr7QzuRY6UxWe28ZFvdRJ2zB6t6qDnqu9baDKWbulJF85IaZkS69R~F9YJmENiVB-YNRFzyP-uVjSOeZzPNRppVhaclex-JpYe2vwWYgyRtVRbRtsfQnsBEpc0GQ__&Key-Pair-Id=KUT5TJCACFTXG","At the hearing, witnesses emphasized that program-level accountability — not just price transparency — is necessary to protect students and taxpayers from low-value credentials.

Amy Laitinen of New America told the committee that the gainful-employment rule and the Financial Value Transparency (FVT) rule act as regulatory backstops to protect students from risky certificate programs and unaffordable debt. “Gainful employment is the backstop… the Department of Education is reconsidering it during an upcoming negotiated rulemaking session,” she said, urging Congress to ensure the rule stays in effect or is codified in law.

Laitinen also said the department has completed two rounds of FVT data collection and should publish the results: “We could publish those now and have information that students could use today.” She argued FVT and related disclosures help students see which programs “pay off” before they enroll.

Members warned that weakening these rules would encourage more institutions to create certificate programs with poor outcomes. Laitinen and other witnesses recommended a mix of strengthened transparency, restored enforcement capacity and targeted investments (for instance to restore Pell purchasing power and fund outreach programs) to ensure students and taxpayers are protected.

Ending: Witnesses urged the department to publish FVT data, preserve or strengthen gainful-employment protections, and ensure the regulatory framework addresses certificate programs with concentrated poor outcomes.","Experts told a House subcommittee that gainful-employment and financial-value transparency rules are essential accountability tools for program-level outcomes and that publication of already-collected data would help students compare programs before enrolling.",{"_33":88,"_35":36,"_37":38,"_39":89,"_41":90,"_43":91,"_45":92,"_47":93,"_49":94,"_51":95,"_53":96,"_55":56,"_57":58,"_59":97,"_61":62,"_63":64,"_65":98,"_67":68,"_69":70,"_71":72,"_73":72,"_74":72},6463741,"Witnesses warn Department of Education staffing cuts and recent aid changes will hamper transparency and affordability",869,1077000,1946000,"/Search/View?dp=1&key=5785090-bf5256a9a7028f37fec785219dc3e7ca&start=1077&end=1946","https://assets.pipeline.soar.com/5785090-bf5256a9a7028f37fec785219dc3e7ca/thumbnail_1077000.jpg","/articles/6463741/Witnesses-warn-Department-of-Education-staffing-cuts-and-recent-aid-changes-will-hamper-transparency-and-affordability","https://secure.pipeline.soar.com/6463741-9309b425f420d03d2e068265ddfcc909/orig.mp4?Expires=1773569655&Signature=hha9JdRMlzFplXdpvrFr3ODpQNWcDT2yVeABPPjW3PLgSZ1w2J9VS7Xi40CQUxTRHlGgQxYHee4595ZzNIJsUJ-oyz4m1JFEKFI09yOfMIeYtqHezRC5qShzkugfLjRjDtWR-kEPw7KtIYOnVS7gl004X7dT7feoZ~vBUQqYNlADqaGPI1z4H49OALjo2xKyP5FJqYzIbIf3Ybto-Opxk5nYSQPSPEeYmcac~PQhjK7cdN6gTnbLunvLm-eM0crNW7aWEB~Yr55H-TyNPgP06YrlZ8i93h8akGru5QR9w~qnZBDDq0AIp~vza88AqdZfsDmyQdd5BwBwohm0g1BEYA__&Key-Pair-Id=KUT5TJCACFTXG","Witnesses at the subcommittee hearing raised consistent concerns that reductions in federal agency staffing and recent legislative changes to student-aid rules could undermine both transparency efforts and affordability for students.

Ranking Member Adams and witnesses pointed to Department of Education staffing reductions at the Office of Federal Student Aid and to cuts in policy and research offices. Amy Laitinen of New America told the committee that the department needs “people and resources” to enforce protections and publish transparency data: “They require people and resources. And right now the department needs both.”

Members and witnesses repeatedly referenced elements of the recently enacted reconciliation package (discussed in testimony as HR 1 and, by one witness, as the “big ugly bill”) that they said would reduce aid for some borrowers, limit graduate-PLUS loans and cap Parent PLUS borrowing. Laitinen said those changes “will make it harder for students who don't come from wealthy families to be able to afford to go to medical school and become doctors.”

Committee members and witnesses warned that shrinking department staff and data-collection capacity imperil tools and rules relied upon for consumer information. Laitinen urged the department to publish Financial Value Transparency data already collected and to maintain the gainful employment and financial-value transparency rules that provide program-level outcomes. Several members asked whether cuts to the National Center for Education Statistics and the Institute of Education Sciences would hamper the department’s ability to produce the data students need.

Lawmakers and witnesses said these policy and staffing changes could disproportionately harm low-income, first-generation and nontraditional students who rely on federal supports, outreach programs such as TRIO and GEAR UP, and reliable federal data when making decisions.

Ending: Lawmakers signaled intent to continue oversight of the Department of Education’s data capacity and to evaluate how recent law changes affect access and program enforcement.","Witnesses and members said Department of Education staffing reductions and recent changes in federal student-aid law (referred to in testimony as HR 1) risk reducing the department’s capacity to publish data, enforce rules and maintain aid programs that help affordability.",{"_33":100,"_35":36,"_37":38,"_39":101,"_41":102,"_43":103,"_45":104,"_47":105,"_49":106,"_51":107,"_53":108,"_55":56,"_57":58,"_59":109,"_61":62,"_63":64,"_65":110,"_67":68,"_69":70,"_71":72,"_73":72,"_74":72},6463745,"Lawmakers, experts back standardized aid offers, better net-price tools and price guarantees to reduce sticker shock",829,1267000,2096000,"/Search/View?dp=1&key=5785090-bf5256a9a7028f37fec785219dc3e7ca&start=1267&end=2096","https://assets.pipeline.soar.com/5785090-bf5256a9a7028f37fec785219dc3e7ca/thumbnail_1267000.jpg","/articles/6463745/Lawmakers-experts-back-standardized-aid-offers-better-net-price-tools-and-price-guarantees-to-reduce-sticker-shock","https://secure.pipeline.soar.com/6463745-4d7968c8e3334813b025bcd47090f72d/orig.mp4?Expires=1773569655&Signature=C1X~rs0NFaai~Prye-CEMrVHlk8K2zjfyJ9Lt81DdoRlTvDROqNLTA3OjjJ9IDq8VXvlTefjwM4ZH3srF5HuIxeFAKHlE0aLQlAZ4WaUvJ0gnoL2zMvIoHfmkPZbRqICc1HmtVmwcXkGOVfjUnTM45AJKeRertqN~SMkdaC7XFmQw31~bzqAu7yMIAvJ1FAJNFqf-s2uW3t9qEVX2Sw2wDt3P2NOomcnp-mV1XZFJ-1K1TT4DYeYlknF2omLO~eWg357jzCq-0KTi2tallTIIJ98qy8o5zZUqtnzyCIIoSKx--nBqisE-DCTJigiDhBE3-Rqi5EIRjHSpw1Ailgv0g__&Key-Pair-Id=KUT5TJCACFTXG","Members of the House Education and Labor Subcommittee and witnesses outlined a set of bipartisan proposals intended to give families clearer, comparable information about college costs.

Justin Draeger of Strada Education Foundation said families want three things: “1 clear all in number as early as possible,” a guarantee that price “won't change while they're enrolled,” and “1 clear sense of return on their investment.” Draeger urged standardized plain-language pricing and fixes to incentives that lead institutions to raise sticker prices.

Andrew Gillen, research fellow at the Cato Institute, recommended legislation that would standardize financial-aid terminology, supplement current net price calculators with a universal, machine-readable tool, and require price guarantees for the typical program length (for example, two years for an associate degree and four for a bachelor's). Gillen said the “strongest argument for price transparency is the moral one: eliminating surprise bills.”

Amy Laitinen, senior director of higher education at New America, cited research that “a third of financial aid offers … didn't include cost information” and warned that colleges sometimes use institutional aid to recruit wealthier students rather than help low-income students. She urged passage of the bipartisan College Transparency Act and keeping the Department of Education’s financial value transparency rule in place.

Committee members asked about state examples. Gillen pointed to states such as Ohio and North Carolina as early adopters of price guarantees. Members also raised concerns about inflation and how a multi-year price guarantee would accommodate sudden cost shocks.

Witnesses and members agreed that while transparency alone will not solve affordability, standardized, comparable disclosures and ‘‘all-in’’ price guarantees could reduce the surprise costs that drive some students to drop out.

Ending: Lawmakers signaled interest in legislative steps to standardize aid offers, improve net-price tools and pilot price guarantees, while acknowledging the need to protect students from cost shifting and to allow adjustments for extraordinary inflation.","Witnesses and lawmakers in a House Education and Labor subcommittee hearing urged standardized financial aid offers, improved net-price calculators and limited price guarantees so students see an accurate, comparable “all‑in” cost early in enrollment.","actionData","errors"]

Article not found

Witnesses describe ‘unfunded discounting’ as widespread pricing scheme that can leave students footing peers’ scholarships

Witnesses urge keeping gainful-employment and financial-value transparency rules to protect students from poor-value programs

Witnesses warn Department of Education staffing cuts and recent aid changes will hamper transparency and affordability

Lawmakers, experts back standardized aid offers, better net-price tools and price guarantees to reduce sticker shock