Tuition Discounting and Voluntary Financial Statement Disclosures in Not-for-Profit Higher Education Institutions

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Abstract

Tuition discounting, or the reduction in sticker price for college, has rapidly increased in recent years —signaling unsustainability in the long-term for institutions. However, little is known about such practices because institutions often do not disclose beyond what is required of them, raising concerns about transparency in financial reporting. This study examines a panel data set of financial statements of 33 Californian, private, non-profit institutions of higher education to determine the association between the level of tuition discount and voluntary financial statement disclosures. This study provides evidence that institutions with lower tuition discount rates provide voluntary financial statement disclosures on their tuition discounting practices. This study contributes to the voluntary disclosure literature by providing insight into determinants of disaggregated and non-traditional information disclosure by not-for-profit universities in a competitive environment.

Authors

• Matthew Reidenbach, Pace University

• Kimberly Fong, Pace University