What the article misses, though a few commenters pick it up, is that this discounting is also a form of price discrimination to maximize profits. The instituti

What the article misses, though a few commenters pick it up, is that this discounting is also a form of price discrimination to maximize profits. The institution will charge each customer based on their willingness (ability) to pay. The schools are actually in a great position to do this because of the fine granularity of the grant amounts and the willingness of their customers to divulge their willingness to pay. A counterbalance to this though is that bright students are as much the product as they are the customers, especially in elite schools, where building up networks is a key driver of demand.