Why 'Tuition Discounting' Is Slashing the Price of College Tuition, but on the School’s Terms

College-bound families can get even higher discounts by following a three-step process.

Published: 10/22/2025, 1:52:38 PM EDT

Why 'Tuition Discounting' Is Slashing the Price of College Tuition, but on the School’s Terms — The campus of Harvard University in Cambridge, Mass., on July 8, 2020. (Maddie Meyer/Getty Images)

With American birthrates in decline and the cost of college skyrocketing, universities are getting creative with their tuition pricing structures and are using discounts to get students on campus.

There’s a good reason for that, especially on cost levels alone.

It’s not uncommon for college costs, including tuition, room and board, fees, and books, among other expenses, to reach nearly $100,000. Data from The Princeton Review’s “The Best 389 Colleges” shows Yale University, Brown, Tufts, and New York University all cost around $90,000 for one year of schooling.

With families in penny-pinching mode, that figure is a non-starter, and that’s where tuition discounts can get students on board, with some caveats by colleges.

“There’s a lot of money flowing around, a lot of discounts,” said Ron Lieber, a New York Times money columnist and author, at the 2025 Society for Advancing Business Editing and Writing’s Personal Finance Summit in New York City held this month.

Lieber’s research shows colleges rely on consultants to help set “real” tuition costs, which are highly discounted and reliant on a student applicant’s habits and their family’s ability to pay.

“Most colleges can't charge what Harvard does for most families, so many colleges hire consultants to help figure out what merit scholarships to offer,” Lieber said in an Instagram post. “The consultants use algorithms to suck in data about your kids (including how often they visit a college's website, what they look at, and how quickly they open the college's email) and you (your address, which is a good proxy for income even if you don't apply for need-based aid).

At that point, the algorithm guesses the highest price that parents and students are willing to pay. “That means the smallest discount a school can get away with offering to get you to come,” Lieber noted.

A Bait and Switch Game?

College students and parents may not realize it, but schools are baiting them by setting a high tuition cost with a high sticker price, then offering a modest discount.

“Tuition discounting is simply allowing students to pay a lower price than the sticker price by offering merit and/or financial aid,” Jack Wang, host of the Smart College Buyer Podcast, told NTD. “Colleges do this to attract desired students who may otherwise not attend.”

There’s a psychological effect that colleges understand. “Offering a discount, especially a merit scholarship, is perceived as achievement,” Wang noted.

For example, if a college charges $90,000 but offers a scholarship of $10,000, to bring the price down to $80,000, parents are more eager to sign on the bottom line.

”The offer seems like more of an achievement than the same college simply charging $80,000 but with no scholarship,” Wang said. “Offering the scholarship allows the student and family to feel a sense of accomplishment, and something to brag about to friends and family.”

Here’s How College Families Can Cut the Best 'Discount' Deal

Knowing how the game is played, college-bound families can get even higher discounts by following a three-step process, according to Danilo Umali, founder of Georgia-based Game Theory College Planners. Here’s how it plays out.

Go after colleges with hefty price tags.
Make sure your student's SAT/ACT score is aligned with the top quartile of that particular college to secure the lion's share of the aid that is awarded from that college.
Find out the college's "enrollment yield," but don't ask them for that number directly. “Most families don't go around throwing the verbiage around,” Umali said.

Basically, the "enrollment yield" is the percentage of students who accept offers when the college makes them. “Elite universities and colleges can have yields of only 25-35%,” Umali noted. “This is common. Colleges with yields in that range or lower will almost certainly pay out significant merit aid and grants that can cut the sticker price in half (maybe even more).”

Families should note that colleges with lower yields tend to be more open to negotiation.

“This is why colleges like Harvard and Yale don’t pay merit aid, as they have no trouble filling seats,” Umali added. However, many elite and "Ivy League-adjacent" colleges will compete for students using discounts and merit aid.”

The views and opinions expressed are those of the interviewees. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. NTD does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. NTD holds no liability for the accuracy or timeliness of the information provided.