College-provided scholarships, or tuition discounts, are in the news. The National Association of College and University Business Officers recently estimated that the average discount for full-time, first-year undergraduates at private nonprofit colleges and universities hit 50 percent in the fall of 2017. In other words, these institutions provide scholarship grants that reduce a typical new student's tuition and fees by half. In one sense, this is good news for students. Scholarships lower college costs for their recipients and make college a possibility for those who could not otherwise afford it. On the other hand, tuition discounting can reduce schools' revenues and undermine the quality of their academic and extracurricular programs. There are also concerns that colleges that offer extensive merit scholarships are likely to reduce need-based scholarships to offset the loss in revenue from merit-based tuition discounts. If so, many students from lower-income families may find college unaffordable as colleges compete to attract highly-desired, more-affluent students who would attend some college, with or without a discount. Using data from U.S. Department of Education's Integrated Post-Secondary Educational Survey (IPEDS) and the Common Data Set (CDS), a collaborative data-gathering project of the College Board, "Peterson's", and "U.S. News and World Report", the author examines discounting practices at 125 private liberal arts colleges (Caskey, 2018). He found two striking, and initially puzzling, patterns in the data: (1) colleges that depend heavily on tuition revenue commonly provide scholarships to much larger percentages of their students than do the colleges with substantial budget support from large endowments. How can the tuition-dependent colleges afford to do this? and (2) although all colleges offer need-based scholarships, the use of merit-based scholarships is highly variable. Some colleges offer them to all entering students who do not have need-based scholarships. Others offer no merit scholarships. He argues that these patterns emerge as colleges in different circumstances trade off the costs and benefits of tuition discounting. Specifically, most endowment-rich colleges would see no net benefit from merit scholarships and do not offer them or offer very limited merit scholarships. All colleges gain from need-based scholarships, and all offer them. But the scholarships provided by tuition-dependent colleges can force reductions in per-student spending and encourage further discounting.