What Higher Education Institutions Need to Know About Tuition Discounting

By David Clark, CIA, CFE, CRMA, BDO USA

Universities and colleges in the U.S. are facing a challenging paradox. Over the past 20 years, tuition rates have increased a staggering amount, significantly outpacing inflation. For instance, the average tuition and fees for private universities ranked by U.S. News and World Report over this time have risen 144%, while the average in-state tuition and fees at public institutions have risen 212%. However, the actual net tuition revenue received by colleges and universities has only moderately increased, with some years even having an average net revenue decrease (inflation adjusted). So, how are colleges charging record-level tuition to students but hardly getting a financial benefit?

The gap between an institution’s established cost and the actual cost charged to students is known as the tuition discount. As institutions seek to attract and retain larger, more diverse classes, they continue to offer increased amounts of institutional aid and increase the average tuition discount across programs. This aid may be derived from restricted scholarship funds, but more often is structured as a decision to forgo potential revenue to reduce the cost to the student, which is also known as “unfunded aid.”

While tuition rates across the country rise, the average discount rate is reaching unprecedented levels, exceeding 50% for first-year students in recent years. Further, per the National Association of College and University Business Officers’ 2019 Tuition Discounting Study, nearly 90% of incoming students are receiving some form of institutional grant. In fact, the percentage of students paying full tuition rates is in the single digits for most higher education institutions. Even the most elite and competitive schools are only achieving approximately one-quarter of students paying full rates.

Public outcry over the volume of student debt and cost of college is at an all-time high, and the current presidential administration is considering various forms of intervention. So, why have colleges and universities not just put an end to the discounting practice and instead lowered tuition? Though the industry has seen a rash of “tuition resets” in recent years (e.g., drastic decreases in tuition rates to reflect the standard average cost paid by students), most institutions are wary of such a strategy and, at times, even advised against it. The reason being, much as with commercial goods, consumers still view a higher price as a sign of an item’s superior value (in this case, the education provided).

In actuality, a tuition reset has a relatively minor impact on the amount a student pays to attend a college or university, as students are already only directly responsible for the portion of the cost after institutional aid is applied. Therefore, the cost, which students are currently leveraging public and private grant and loan programs to pay, would still largely equate to the amounts owed under an overall lower tuition rate since most institutional aid is unfunded already. Institutions are using tuition discounting as the primary tool to provide financial support to students and meet or exceed enrollment targets as they consider overall financial aid packaging.

The best-case scenario for colleges and universities is to fund institutional aid through restricted funds and gifts established to provide student scholarships. However, the amount of funding set aside for this purpose in a given budget year likely pales in comparison to the overall tuition discount offered to enrolled students. Therefore, it’s critical to understand how operating budgets depend on tuition dollars and ensure that avenues are available to either fund operations through net tuition revenues and other revenue sources, or reduce costs to reflect the reduction in revenue resulting from the tuition discount.

Higher education institutions should also be cognizant of tuition discounting’s impact on enrollment. As schools get closer to the start of a new academic year and are looking to fill incoming classes, it may seem enticing to offer greater institutional aid to encourage higher enrollment. While those decisions may make short-term sense (it would be better to bring in 30 cents on the dollar for an additional student than not have any tuition revenue at all), it’s important to consider the potential downstream impact of that structure. Will offering more institutional aid now impact the level of discounting needed to recruit and retain future classes? How does aid provided in a student’s first year impact the aid offered in subsequent years for that student?

With the higher education sector already facing declining enrollment trends pre-COVID-19 and further uncertainty regarding class sizes in a post-COVID era, an institution’s tuition discount can become both a powerful tool and a potential pitfall.

Copyright  © 2021 BDO USA, LLP. All rights reserved. www.bdo.com

New law extends COVID tax credit for employers who keep workers on payroll

The Internal Revenue Service urges employers to take advantage of the newly-extended employee retention credit, designed to make it easier for businesses that, despite challenges posed by COVID-19, choose to keep their employees on the payroll.

The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted Dec. 27, 2020, made a number of changes to the employee retention tax credits previously made available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including modifying and extending the Employee Retention Credit (ERC), for six months through June 30, 2021. Several of the changes apply only to 2021, while others apply to both 2020 and 2021.

As a result of the new legislation, eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after Dec. 31, 2020, through June 30, 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum ERC amount available is $7,000 per employee per calendar quarter, for a total of $14,000 in 2021.

Employers can access the ERC for the 1st and 2nd quarters of 2021 prior to filing their employment tax returns by reducing employment tax deposits. Small employers (i.e., employers with an average of 500 or fewer full-time employees in 2019) may request advance payment of the credit (subject to certain limits) on Form 7200, Advance of Employer Credits Due to Covid-19, after reducing deposits. In 2021, advances are not available for employers larger than this.

Effective Jan. 1, 2021, employers are eligible if they operate a trade or business during Jan. 1, 2021, through June 30, 2021, and experience either:

  1. A full or partial suspension of the operation of their trade or business during this period because of governmental orders limiting commerce, travel or group meetings due to COVID-19, or
  2. A decline in gross receipts in a calendar quarter in 2021 where the gross receipts of that calendar quarter are less than 80% of the gross receipts in the same calendar quarter in 2019 (to be eligible based on a decline in gross receipts in 2020 the gross receipts were required to be less than 50%).

Employers that did not exist in 2019 can use the corresponding quarter in 2020 to measure the decline in their gross receipts. In addition, for the first and second calendar quarters in 2021, employers may elect in a manner provided in future IRS guidance to measure the decline in their gross receipts using the immediately preceding calendar quarter (i.e., the fourth calendar quarter of 2020 and first calendar quarter of 2021, respectively) compared to the same calendar quarter in 2019.

In addition, effective Jan. 1, 2021, the definition of qualified wages was changed to provide:

  • For an employer that averaged more than 500 full-time employees in 2019, qualified wages are generally those wages paid to employees that are not providing services because operations were fully or partially suspended or due to the decline in gross receipts. 
  • For an employer that averaged 500 or fewer full-time employees in 2019, qualified wages are generally those wages paid to all employees during a period that operations were fully or partially suspended or during the quarter that the employer had a decline in gross receipts regardless of whether the employees are providing services.  

Retroactive to the Mar. 27, 2020, enactment of the CARES Act, the law now allows employers who received Paycheck Protection Program (PPP) loans to claim the ERC for qualified wages that are not treated as payroll costs in obtaining forgiveness of the PPP loan.

If you have any questions, reach out to the Crosslin tax team at (615) 320-5500.  We are here to help! 

Tips on Virtual Business Meeting Etiquette

Virtual meetings are here to stay; they are the future! Like face-to-face meetings, virtual meetings should be effective, concise, and professional. Your clients and other participants should feel valued.

“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

–Maya Angelou

Key tips to having a successful meeting and encouraging strong participation.


The Look

  • Virtual Style: Design a personal style that works virtually. You are representing your company, so dress up/dress for the occasion. Take virtual meetings seriously and look professional. Make sure your body language is appropriate and look at the camera.
  • Lighting and Framing:  Use the camera on your computer to see what your surroundings will look like to other participants. You need to be visible (not too dark or too light).
  • Group Size and Audience: Consider the size of your group and the audience as you proceed and think about how you will conduct a virtual meeting.


  • Invitation and Meeting Information: Send thelink, password, day, date, and time (including time zone), ask participants to RSVP and give them a deadline.
  • Instructions for Back-up Plan:  If technical difficulties arise, make sure participants know the alternate plan, such as the phone dial-in number.
  • Agenda: Have an (even if brief) agenda and include a schedule with how long the meeting will last and if you will include breaks, etc.
  • Preparedness (Mental): Be mentally prepared, stay positive, be ready for technical difficulties, conversation lags, misunderstanding, contentious moments, and disagreements. Keep on task, be polite and use humor and humility in uncomfortable situations. Be gracious.
  • Preparedness (Meeting): Come to the meeting prepared, just like you would for a person-to-person meeting.
  • Virtual Meeting Tools/Applications: Know how to use virtual meeting tools, such as chat boxes, shared screens, and applications.
  • Test Run & Equipment: Do a test run of the virtual meeting. Get familiar with the equipment – camera, mic, chat tools, and shared documents. Make sure all equipment is working properly prior to your meeting.


Introductions & Managing Expectations

  • Punctuality: Be on time or early (host should open the meeting 5 minutes early). Let the host know if you will be late or need to leave the meeting early.
  • Sound & Video check:  Make sure everyone can be seen and heard.

Let participants know if they are not coming through clearly – either internet (screen freezes), voice (mic), or video (camera).

  • Technical Issues & Back-up Plan: Make sure participants are aware of the dial-in number in the event of technical problems (most platforms allow you to dial into the meeting).  Say something like: “There is an internet connectivity problem, let’s move to the dial-in.”
  • Reaction Time: Be aware that it will take people an extra second or two to respond or jump into the conversation. It is a little more difficult to discern if the person speaking is finished, especially if any internet lag time. Additionally, participants may hesitate to be sure someone else is not going to speak.
  • Introductions: Welcome everyone to the meeting.Start with any introductions and recognize who is on the call and who may be missing.
  • Agenda Adjustments/Overview: Go over any adjustments to the agenda and quick overview of the upcoming meeting.
  • Excusing Yourself/Leaving a Meeting Early:  Communicate who may be leaving the meeting early, let others know it is fine to just wave and go. If you need to leave unexpectedly, wait for a pause in the conversation, raise your hand and say, “I need to sign off, good meeting, thank you.”


  • Video/Camera On:  Show up, have your camera/video on. A dark box or screen with just your name, gives the perception that you are not interested in participating.
  • Listen: Be intentional, stay present, look at the camera, be authentic, clear your desk, silence your phone, and take notes.
  • Speak Clearly:  Speak clearly, slowly and with confidence.  Remember the sound quality may not be great. Be sure to mute and unmute as needed.  Do not forget people can hear you if you are not muted, so do not make a side snide comment-could be embarrassing or awkward!
  • Time: Be aware of the time, make sure a clock is in view.


  • Do Not Interrupt:  Never polite and very confusing on a virtual platform.
  • Do Not Shout into the microphone: Shouting distorts the sound.
  • Avoid Distractions: Such as kids, pets and, outside noises (mute).
  • Do Not Eat: No need to elaborate.  
  • Drinks: Keep beverages close, but out of sight. If you need to take a drink, take a drink as discreetly as possible.
  • Movement: Do not walk around and/or move erratically.

Ending the Meeting

  • Short wrap-up: Keep it short, include a reminder of follow-up items.
  • Parting:  Thank everyone for their time.  Leaving a meeting well and professionally is key, this is the last impression.


  • Follow-up: Send a thank you email and meeting summary and/or any information requested immediately. 
  • Not Addressed in the Virtual Meeting: Ask via email if there were any questions or items that need to be addressed that did not come up in the virtual meeting.

Good Luck and Happy Meetings!

Reminder – It Is Not Too Late to Qualify for the Tennessee Business Relief Program

[Note that this program is limited to smaller taxpayers and to businesses only in certain sectors.  Before exploring the changes below, you can see the eligibility restrictions at   https://www.tn.gov/revenue/tennessee-business-relief-program.html.  Feel free to share this information with others that may be eligible.]

Earlier this summer, Gov. Bill Lee announced the use of federal coronavirus relief funds to assist Tennessee small businesses impacted by the COVID-19 crisis.  The governor enlisted the Tennessee Department of Revenue, through the Tennessee Business Relief Program, to issue payments to small businesses for costs incurred as a result of mandatory business closures.  The Department of Revenue is identifying eligible companies through their tax identification numbers and sending out eligibility notifications.   This will not affect all our clients, so you will need to determine if you are eligible.  

To confirm your eligibility and to expedite the payment process, companies must complete the pre-award certification located in the Tennessee Business Relief Program section on the TNTAP home page. The department instructs that you do not log in, but rather fill out the form.  This same link can be used to check the status of your payment once your certification has been submitted.

Here is the step-by-step process to confirm eligibility and follow the payment process: 

1.  Visit https://tntap.tn.gov/eservices.  To see the needed link on TNTAP, you must NOT be logged in as a specific taxpayer, so please log out, if necessary.

2.  Look for the heading “Tennessee Business Relief Program” at the top right of the TNTAP homepage.

3.  Click on the link labeled “Tennessee Business Relief Certification/Status” and enter the required information.

4.  Once complete, please print or otherwise note the confirmation number for your submission. 

Once the certification form has been completed and your eligibility confirmed, the department will issue you a business relief payment. Payments will be made by direct deposit if the business has previously provided bank account information and authorized the Department to save that information. Otherwise, payments will be made by check.

If you have any questions regarding the Tennessee Business Relief Program, please give the Crosslin tax team a call at 615-320-5500.  We are here to help!