AAA Spark Meeting of the Regions

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

• In Event: Topics on Academia

Abstract

Tuition discounting, or the reduction in the sticker price for attending a higher education institution, has rapidly increased in recent years —signaling a potential lack of long-term sustainability for these institutions. However, stakeholders know little about such practices because institutions often do not disclose beyond what is required of them under FASB Accounting Standards Codification 958-605-45-2, raising concerns about transparency in financial reporting. Yet, since the Great Recession, students have become more price-conscious and value-conscious. This study examines a data set of 2010-2014 financial statements from California private non-for-profit higher education institutions to analyze 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 a larger number of 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.

Author

• Matthew Reidenbach, James Madison University