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

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…