ABSTRACT
This chapter discusses the net price of attendance that determines what a student will pay out-of-pocket. The reaction by prospective students to the price set by an institution can create a condition known as price sensitivity. The greater the ratio, the greater the difference between admits and matrics and the greater the price sensitivity. Issues of price sensitivity will be for institutions of three different types: highest-priced/most selective private institutions; other higher-priced/more selective institutions; and lower-priced/less selective public institutions. Lower priced institutions tend to be public institutions. These colleges and universities generally have substantially lower price tags, not necessarily because they deliver a substantially different product to their students, but rather because the large state subsidy serves the function of lowering tuition not only for the needy but for everyone. An institution assesses its ability to make awards to students at different levels of need based on average awards that are calculated for the institution.
