Student tuition discounts are one of the most overlooked ways to cut the cost of college. Whether through your parents’ alumni status or their employment at a higher education institution, you may be eligible for thousands in tuition savings—often without realizing it.
Many families know that having a parent who attended a college can help with admissions, but fewer realize that legacy connections and employee affiliations can also reduce tuition costs significantly.
Big Savings for Children of College Employees
One of the most powerful programs available is the Tuition Exchange—a national network of over 625 colleges and universities offering reciprocal scholarships for the children of faculty and staff.
How the Tuition Exchange Works
If your parent works at a participating college or university, you may qualify for generous tuition benefits at any other school within the Tuition Exchange network. You don’t need to attend your parent’s institution.
Some examples of what’s offered:
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Full tuition coverage at private colleges
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Half tuition discounts at public universities for non-resident students
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Standardized scholarships, adjusted annually (e.g., $33,000 minimum in 2015–2016)
Although Ivy League schools don’t participate, top-tier institutions like USC, Fordham, and Smith College do. These benefits can dramatically lower college costs and reduce student loan dependency.
Tax-Free Tuition Reductions for Families
According to IRS Publication 970, many of these tuition reductions are completely tax-free, especially for undergraduate students. Tax-free tuition benefits apply when provided to:
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Current or retired college employees
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Dependents or spouses of employees
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Widows or widowers of former employees
For graduate students, the discount is tax-free only if the student performs teaching or research duties.
This IRS rule ensures families get maximum value from tuition discounts without additional tax liability.
Legacy Tuition Benefits and Scholarships
Don’t worry if your parent doesn’t work in higher education. Many universities offer legacy tuition discounts or scholarships for children and grandchildren of alumni. These programs support family traditions in education and reward multigenerational connections.
Notable Legacy Tuition Programs
Here are some examples of how universities support legacy students:
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University of Kentucky – Legacy Tuition Program
Partial awards for non-resident students with alumni parents. -
Pittsburg State University – Legacy Program
Reduces out-of-state tuition costs by approximately $7,500. -
University of Kansas – Jayhawks Generation Scholarship
Offers up to $50,000 over four years for eligible freshmen. -
Southern Illinois University – Legacy Alternate Tuition Rate
Eligible students pay just 80% of the standard tuition if their parent is a graduate.
How to Maximize Your Legacy Advantage
Whether you’re applying to a large public university or a small private college, always:
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Ask about legacy or alumni-related discounts
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Inquire about tuition reductions for college employee families
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Check the Tuition Exchange website to confirm your eligibility
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Read IRS Publication 970 for tax implications on tuition benefits
Many students miss out on thousands in savings simply because they didn’t know to ask.
Final Thoughts: Leverage Your Family Connections
Your family’s ties to higher education—whether through alumni status or employment—can be a powerful financial asset. From tax-free tuition waivers to exclusive scholarships, student tuition discounts can save you tens of thousands of dollars.
Before you finalize your college list, do a little research into what you might qualify for. Sometimes, a simple question about legacy or employment status could lead to big financial rewards.
FAQs: Student Tuition Discount
What is a legacy student in college admissions?
A legacy student is someone whose parent or grandparent attended the college they’re applying to. Many schools give admission preference and may offer scholarships to legacy applicants.
Do legacy students get tuition discounts automatically?
Not always. You often need to apply separately for legacy scholarships and meet specific eligibility criteria.
How does the Tuition Exchange program work?
It’s a reciprocal network of colleges offering tuition benefits to children of faculty/staff at participating schools. Benefits vary but often include full or partial tuition coverage.
Are tuition reductions taxable?
Generally, undergraduate tuition reductions are tax-free for employees and their dependents. Graduate tuition reductions are only tax-free when tied to teaching or research.
Can grandchildren of alumni get college discounts?
Yes, some schools extend legacy tuition benefits to grandchildren of alumni, though policies differ by institution.
