To study the effects of college tuition discounting, data from annual Institutional Student Aid Surveys of private colleges and universities were compared to enrollment and Pell Grant data from the U.S. Department of Education. Findings indicated that: (1) at least one quarter of the colleges and universities used discounting strategies that resulted in large losses of tuition revenue; (2) institutions with the greatest increases in discount rates raised their spending on institutional grants by $3,375 per undergraduate, but their tuition and fee revenue grew by just $3,069; (3) discounting strategies do not appear to have significantly improved the academic profiles of admitted undergraduates when measured by changes in median admissions test scores of entering first-year students; (4) tuition discounting does appear to have helped institutions increase their numbers of low-income undergraduates; and (5) the increased use of tuition discounting does appear to have made it possible for more students from all income levels to enter higher education. (Contains 42 references.) (EV)