Not many life events feel as satisfying as graduating from college, especially when that diploma comes with an award of $1,000 or more.
No, that money isn’t a graduation gift from Granny. Instead, tuition rebate programs, sometimes called graduation bonuses, award students for reaching graduation or other academic benchmarks within a certain time frame.
In late February, Howard University accompanied news of a tuition freeze with the announcement of a rebate. The new program, which gives on-time or early graduates a 50 percent reduction in their final semester’s tuition, aims to shuttle motivated students to the graduation finish line.
“It’s new territory,” says Wayne A.I. Frederick, president of Howard. “I think it’s looking at tuition pricing a little differently. It’s looking at where we’re putting the incentives as well.”
The University of Texas system recently implemented a rebate for eligible students enrolled in its Guaranteed Tuition Plan. The university offers a rebate — the amounts vary by school and year — each time a student completes a specified number of credit hours on time. A separate statewide program in Texas rebates 1,000 to undergraduates’ bills when they graduate on time without taking many extra credits.
[Explore the 10 colleges with the highest four-year graduation rates.]
“Tuition rebates have gained public attention over the past few years, spurred in part by legislative pressure to improve graduation rates,” Dana Strait wrote in an email. Strait advises enrollment managers at colleges and universities and is a researcher for EAB, formerly called the Education Advisory Board. The company provides research and technology to higher education professionals. Here’s what to know about tuition rebates.
1. It’s a win-win for students: Students who graduate on time don’t just earn a rebate. They save money on an extra year — or two or three — of tuition, dodge cost increases and enter the workforce faster.
[Discover your risk factors for delaying graduation and accumulating more debt.]
In some ways, that success trumps any tuition rebate — the rebate just sweetens the pot.
“Every term a student is enrolled at a college or university is a term they are paying for,” says Strait. “The largest benefit of graduating in four years is the financial savings of not having to pay for a fifth or sixth year.”
But students who graduate in four years are the exception, not the rule. On average, the four-year graduation rate for the entering class of 2007 is 41 percent, according to data reported by 1,209 ranked colleges and universities in an annual U.S. News survey. The four-year graduation rate at Howard, a historically black university, is 40 percent, according to U.S. News data.
2. It’s not for everyone: Students dreaming of studying abroad, participating in a work experience or exploring different majors may not be the best candidates for these programs.
“You might not be able to do study abroad or take a semester off for a co-op program,” says Wanda Mercer, associate vice chancellor for student affairs for the University of Texas system. “[A tuition rebate] could preclude you doing some of those things.”
[Learn how to understand the differences between a co-op and internship.]
Other students who might be struggling with the college experience, juggling school with family and work or failing to enroll in required courses on time may find that these rebates don’t cater to them either.
For students unsure about their ability to score a rebate, “I would utilize every piece of support that you can on the campus,” says Marybeth Gasman, a professor in the Graduate School of Education at the University of Pennsylvania and director of the school’s Center for Minority Serving Institutions. Those could include advising services, writing tutors and course scheduling assistance.
But for some students, such as Blake Newby, a sophomore at Howard, her goal to cash in on a rebate is a no-brainer.
“It’s always been in my head that I was going to graduate in four years — I never thought I’d stay any longer,” Newby says.
And she’s not waffling on her broadcast journalism major either. “I’ve known that I’ve wanted to be on TV since I was about 8,” she says.
3. Schools win, too: Improving graduation rates is a boost for schools. “Improved graduation rates benefit colleges and universities in a variety of ways that start with fulfilling their missions to educate the public but that include raising institutional rankings and, for many public colleges and universities, extent of legislative funding,” says Strait, from EAB.
State coffers may benefit as well. “Across the country, as money is being squeezed in the legislatures, they realize that if students spend five to six years in college, it costs the state more money,” says Mercer, of the UT system.
For Newby, the Howard student, state and institutional revenues are far from her mind. Instead, she’s considering her parents, who are shouldering her tuition bills. “My parents are going to get some of that money back that they’ve invested in my education,” she says.
Trying to fund your education? Get tips and more in the U.S. News Paying for College center.
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3 Things to Know About University Tuition Rebates originally appeared on usnews.com
