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Few topics are hotter right now than that of tuition pricing and discounting. And that's because across the country, colleges and universities are taking no end of approaches to the matter. Which institutions are on target? Which are not? Some have historically taken a high price/high discount approach. Others have kept price and discount increases suppressed. Some have cut prices, while others have dramatically increased price to reposition against competitors.

One of the most vexing issues in financial aid today has to do with efficiency: If a school has $10,000 to spend on scholarships or tuition discounting, it can probably get more institutional benefit-in terms of enrollments, tuition revenue, and student quality-by spreading the money among four or five middle-income students rather than investing it in a single high-need student. Schools may prefer to provide access to the poorest students, but the incentives built into the current financial aid system are hard to ignore.

A dip in the economy is hard on everyone, but for higher education, hard times are aggravated by a kind of triple whammy of financial need: When the economy dips, more parents and students are out of work, and more investments shrivel. The result: Colleges and universities are asked to meet more financial need. State legislatures, faced with eroding tax revenues and increased demands on the state coffers, cut funding to education. The result: less money to meet the increased student need.

Welcome to University Business's special report on student finance, the first of a regular series of special reports on the subject. Student finance has long been an important aspect of the business of higher education, but in the past few years we've seen it become more and more central to the way that institutions operate, to the point where it seems to us that everyone on senior administrative levels-everyone who has an impact on institutional strategy-needs to be thinking about the Financial Aid office and how it fits in.

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