According to an Inside Higher Education article, “Slashing Prices,” 2008 saw the largest share of tuition discounting ever. In the fall of 2007, the average tuition discount for full-time freshmen at private institutions was 39%; in the fall of 2008 that rate had gone up to 42%. According to the article, the discount rate “represents the share of tuition and free revenues colleges use to award institutionally funded aid.”
Apparently, discounting college tuition rates has become common practice at most private institutions. In fact, the standard practice involves setting the “sticker price of attendance beyond the reach of many families, only to effectively slash that price by offering institutionally funded financial aid to many or, more typically, most students.”
In terms of the breakdown of aid, most of the discounting aid (about 41.5%) was awarded on a non-need basis (like academic merit). 36% of the aid went to need-based applicants, and 22.5% went to a combination of need and non-need based applications.
(These numbers are based on a report released by the National Association of College and university Business Officers (NACUBO).)
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Read the full article: College Admissions News: Discounted Tuition Becomes Common Practice