Tuition discounting (TD), a practice whereby institutional grants are used to subsidize a student's educational expense, has become a common practice at four-year institutions. TDs impact on enrollments, financial aid, and budgets continues to increase, raising concerns about the long-term sustainability of the practice. Drawing upon Breneman's (1994) economic theory of four-year private institutions and mirroring Hillman's (2001) approach at public institutions, this research examined trends in student characteristics, enrollment, institutional grants, and net tuition revenue (NTR) and the relationship between TD practices NTR. Analyzing panel data of four-year, small, liberal arts colleges from 2003-2012, results illustrated that over the 10-year period, enrollment, tuition, and number and amount of institutional grant aid increased; average yield and SAT average score decreased. NTR has increased but lags behind increases in tuition and gross tuition revenue. Additionally, there is a point at which TD practices do not generate additional revenue. Findings suggest that TD is used to achieve enrollment goals but there is a point at which increasing the discount rate can impede these goals and even jeopardize the financial stability of the institution. Implications of these findings for institutional and higher education policy and practice are discussed.