Those slashed retail prices that fuelled your holiday shopping binges might be illusions. ProPublica explains why college pricing is similar -- but even less transparent
You know all those seemingly great sales during the holidays? It turns out, they are often a “carefully engineered illusion.” A recent piece in the Wall Street Journal defines what it calls “retail theater,” noting that often the discounts being offered to bargain-conscious consumers are carefully planned out by retailers from the start:
The common assumption is that retailers stock up on goods and then mark down the ones that don't sell, taking a hit to their profits. But that isn't typically how it plays out. Instead, big retailers work backward with their suppliers to set starting prices that, after all the markdowns, will yield the profit margins they want.
The red cardigan sweater with the ruffled neck on sale for more than 40% off at $39.99 was never meant to sell at its $68 starting price. It was designed with the discount built in.
Some retailers that sell online even set their discounts depending on user information, as the Journal reported last year:
The Staples Inc. website displays different prices to people after estimating their locations. More than that, Staples appeared to consider the person's distance from a rival brick-and-mortar store, either OfficeMax Inc. or Office Depot Inc. If rival stores were within 20 miles or so, Staples.com usually showed a discounted price.
Higher education may seem like a different world, but universities in many ways have been working from the same playbook.
Savvier college-bound consumers know that the so-called “sticker price” of tuition and fees at a given college or university isn’t what many – or even most – students pay.
Take American University, where 74 percent of full-time freshmen got a grant or scholarship – essentially, a discount off the list price – for the 2011-2012 school year. Or Drexel University, where that figure was 98 percent.
At nearly 200 schools, 100 percent of full-time freshmen got a scholarship, as DePaul University’s Jon Boeckenstedt points out.
A recent study of discounting at private non-profit colleges found that the average institutional grant has grown as a percentage of sticker price, hitting an all-time high of roughly 53 percent. But the report, released in May by the National Association of College and University Business Officers, also pointed out that while larger discounts are generally a good thing, students could still end up paying more depending on how much the sticker price is going up at the same time.
Like retailers, colleges and universities are increasingly getting more sophisticated about how they give out discounts, offering so-called “merit aid” to students they especially want to enroll.
Private universities have led the way in discounting, but as we’ve detailed, the practice has spread to public universities as well. Many state schools have moved toward the “high-tuition, high-aid” model by discounting for students with high test scores or for out-of-state students who will ultimately pay more than residents, even with a small discount.
Some colleges – mostly private colleges – will even price-match if students know to ask. (It’s not unlike your local Best Buy, really.)
The growing discount rates and the lack of transparency in the pricing of higher education have prompted some schools to try another approach. A few colleges and universities have opted for “tuition resets,” announcing they’re slashing sticker prices by as much as $10,000 – while often reducing aid.
Call it the J.C. Penney strategy. The retailer tried to move away from high-low pricing and move to “everyday low prices,” only to find out the hard way that customers really, really love a discount.
Yet at least initially, some colleges such as Concordia University have gone the “tuition reset” route and have found that the lower rates (and the accompanying PR boost about the lower rates) got more student applications in the door, raising enrollments and ultimately, net tuition revenue. Whether that interest from consumers will keep up after the headlines fade remains to be seen.
It’s worth mentioning that one big difference between the pricing of higher education and other consumer goods is the ease of comparison shopping: When you’re shopping for a new TV set, it’s relatively easy to compare prices with a little research. It’s much harder to do that with colleges, especially when you have to narrow down your options to a manageable number and submit applications before knowing for sure how much each option will end up costing.
There are, of course, tools out there intended to make college costs more transparent. Colleges are required to post net price calculators to give prospective students – or, at least, those who put in the time to find the calculators online and enter in their personal information – a better sense of what a given school might cost them after discounts. But the calculators have their limitations: Some estimates are more accurate than others, depending on the complexity of the colleges’ calculators, which are not standardized. (In more recent news, lawmakers have introduced a law aimed at making the calculators more user-friendly.)
As it stands, it’s not always clear whether consumers actually win when colleges – or retailers – tinker with their pricing and discounts. What is clear is that when the system isn’t especially transparent, discounts can get people overexcited, whether they’re real savings or not.
Stock exchanges and regulators only consider complaints related to listed companies. However, one can file a complaint about bonds, debentures and unlisted companies with the MCA. Here is a guide for you on filing complaints
Moneylife receives a steady stream of complaints from people who have been lured to invest their hard earned savings in unlisted companies. As a rule, we actively discourage people from investing in unlisted companies, unless it is a family undertaking and you are fully aware of the risks. The worst con is by financial advisors who entice people to by shares of unlisted companies with the promise of making a huge profit when the company is listed. A quick look at some statistics would reveal that there were only three IPOs in the entire calendar year. And, while 35 odd small and medium enterprises (SMEs) were listed, they have almost no volumes.
Clearly, neither the stock exchanges nor the SEBI Complaint Redress System Website (SCORES) is empowered to look at these complaints. The Ministry of Corporate Affairs (MCA) accepts complaints against unlisted companies as well as those listed on exchanges. The MCA website provides separate complaint options for shares, debenture or bonds and also classifies the nature of complaints to make it easy to report. You can choose appropriate option and file online complaint on MCA website.
Here is the guide on how and where to lodge a complaint related to bond, debentures, of listed and unlisted companies with the Ministry of Corporate Affairs (MCA).
1. First send a written complaint to the company. If you do not get a satisfactory response and your grievance is not redressed then escalate the issue. You can file an online complaint to MCA.
2. On MCA website click on the right side menu under ‘Important Links’ click on ‘Lodge Investor Complaints’. It will provide you ‘Investor Complaint Form.’
Fill in all the necessary information before you submit your online complaint.
3. While filling online complaint form on MCA website, you need to find out and enter ‘corporate identity number (CIN)’ of the company.
4. You will find many options regarding nature of complaint. If your complaint is regarding debentures or bonds, in option 3 - ‘Nature of complaint’ – choose ‘Debentures or bond’ and in sub section of 3 (ii) ‘Complaint on debentures or bond’ select correct option, describe your issues and submit the form after filling all the necessary information.
To file an online complaint with Securities and Exchange Board of India (SEBI), (only complaints regarding listed companies or prelisting of debentures and bonds or shares)
1. Go to SEBI Complaint Redress System Website (SCORES) than in section of ‘Investor Corner’ choose ‘Complaint Registration’. After clicking on it, you will get ‘Complaint Registration Form’ open it and fill necessary information.
2. While filling your information, in ‘Complaint Details’, select appropriate option as per nature of your complaint incase of complaints related to bonds and debentures select first category – ‘Listed Companies’ and choose third option - ‘Prelisting/Offer Document (Debentures & Bonds)’ and it will open window. After filling all the necessary information submit the form.
3. For guidance or complaints you can call on toll-free SEBI Investor Helpline no—1800 266 7575 or 1800 22 7575 which works on all days from 9:30 AM to 5:30 PM excluding declared holidays in the state of Maharashtra.
To file a complaint on stock exchanges—National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)—in case of listed companies and trading members.
If you have complaints regarding debt securities of companies or equity shares which are listed on BSE you can also file it on investor grievance of BSE, and for NSE you can file complaint with NSE Investor helpline—NSE Investor Center (NICE).
NSE’s Investor Services Cell and BSE’s Department of Investors Services both offers platform to file complaints against listed companies as well as trading members, with option regarding issues with equity shares or debt securities.
Moneylife earlier wrote many articles and cover stories on fixed income and bonds, you can access and read it here.
Weak defence against corruption charge, attack on Narendra Modi and a desire not to be the PM for another term marked Dr Manmohan Singh’s last press conference
The Prime Minister accepted failure to check unemployment and inflation in the last press conference of his tenure as PM. "I am concerned that we have not been as successful as we need to be in generating employment in the manufacturing sector. This is an aspect of performance which we are working hard to correct," he told the media. He pointed that inflation had been difficult to control due to rising commodity prices and energy prices in the international market. These were reasons beyond the control of the Indian government.
Prime Minister Manmohan Singh declared that he will step down after the next Lok Sabha election. "In a few months time, after the general election, I will hand the baton over to a new Prime Minister," Manmohan Singh told the media. "Rahul Gandhi has outstanding credentials to be nominated as the Prime Ministerial candidate, and I hope our party will take that decision at the appropriate time," he added.
The Prime Minister also said that it would be disastrous for the country if Narendra Modi were to become the next Prime Minister. He added that he was fully confident that the next Prime Minister, after the Lok Sabha election, will also be from the Congress-led UPA coalition.
On the performance of the Indian economy during the time he was the Prime Minister, he said, “The rate of growth achieved in the last nine years of UPA rule "is the highest in any nine year period." He also claimed that that the growth process was made more inclusive than ever. It is another matter that the Congress Party was completely routed in the last four Assembly elections.
On the growth versus inflation issue affecting the common man, he said "We have also not been as successful in controlling persistent inflation as we would have wished," he said. "This is primarily because food inflation has increased. However, we should remember that our inclusive policies have put more money in the hands of the weaker sections.”
"To keep food prices in control, we need to increase supplies and also improve marketing arrangements and logistics. This is especially important for items which are perishable such as fruits and vegetables," he added. PDS foodgrain prices have not been increased since 2003.
On the issue of accelerated policy-led growth, the Prime Minister said: "Reform is not an event it is a process. We will continue to push forward the cause of reform."
On the issues of corruption in coal block allocations and 2G spectrum allocations, all the PM said that these related to the UPA-I government and the UPA-II government had been in place after renewing its mandate with the electorate.
To a question if he had ever felt like putting in his papers out of frustration, he said: "I never felt like resigning at any time. I have enjoyed doing my work. I have tried to do my work with all honesty, with all sense of integrity without regard for fear or favour."
The PM claimed that he would come out unscathed when history is written about this period.