Don’t reject a college based on the sticker price. Because hardly anyone pays it. In fact, the average discount rate has been increasing over the last decade. According to a new study from The Chronicle of Higher Education, incoming freshmen at private nonprofit colleges now receive an average discount of 49 percent. Meaning that they’re paying about half the sticker price.

The problem? Four in 10 families reject colleges just because of the sticker price. And 6 in 10 families are unaware of tuition discounting.

I was shocked to learn that most families don’t know how most colleges do tuition pricing, especially private colleges. This disconnect is bad for students because they prematurely walk away from colleges that might be a great fit. And it’s bad for colleges because while their intention was to be generous — “but you’ll get a discount!” — the customer has moved on.  

The Two Metrics: Need and Merit

 When you fly on an airplane, what you pay depends on when and how you booked your flight, how many others were interested in that route, and so on. People pay different amounts of money to sit in the same kind of seat and receive the same service.

Paying for college is like this: Students aren’t paying the same price. But it’s more complicated. Airlines don’t care about the financial background of their passengers. Or if passengers have high or low SAT scores. With colleges, you fill out an application. They see what you bring to the table academically, and perhaps athletically, musically, or artistically.

But you also fill out the FAFSA, a form that takes a deep look at your family’s financial situation. Assets, income, what’s in your Mom and Dad’s name, and what’s in the student’s name. The FAFSA even considers whether your family has other educational expenses. If you’ve got multiple kids going to college, they feel sorry for you. If you’re a few years off, here’s a tip:  The FAFSA does not look at retirement accounts or home equity. So if you want to “look poorer” on the FAFSA, put more money there.

It Pays to Stand Out

Financial need may entitle you to federal or state grants. But there’s greater variability in the realm of “merit aid.” That’s because what gives you merit depends on your profile relative to that of other applicants. You have more merit if you have higher test scores, higher grades, and attended a high school with a stronger reputation, have a well-written application, and better references than others. Colleges want to raise their academic reputation. So they want to collect high-aptitude students. Such students boost a college’s rankings, which boosts their credibility and elevates their chances of attracting more high-aptitude students in the future. So if you’re one of the better students applying to a particular college, they’re going to want you more. That often translates into a better financial aid package.

Only 12 percent of freshmen pay full sticker price. So it’s safe to assume you’ll get a discount. How much? Here’s where public information about a college’s typical incoming class can help you anticipate how well your son or daughter is likely to stack up relative to other applicants. The more your kid stands out, the better the aid package you stand to receive. Also, the richer the college — total budget, endowment, other assets — the more “institutional aid” they’re likely to set aside for students.

What about outside scholarships, from private organizations? They help, but don’t kill yourself looking. Less than 10 percent of students snag private awards. It’s usually chump change. Over 80 percent of the scholarship money going to incoming freshmen comes from the colleges themselves.

Quality vs. Price

Be one of the college’s best applicants and they’ll probably give you a bigger discount. The flip side is that many parents want their child to attend “the best college they can get into” — meaning a school where their child is likely to be among the weakest applicants. Meaning a school that will probably ask you to pay more.  

Are the best schools worth it, no matter the cost? For many, professional success depends more on the person than the school. If you’re the caliber of student that can get into Stanford or MIT, you’ll probably do well no matter where you go. In fact, being “a big fish in a small pond” has its own advantages. Positive attention from professors, fawning letters of reference, the regular confidence boost from being a “top” student — these things help, especially if graduate school comes next. It’s a little-known fact that a good portion of the incoming class at elite graduate programs graduated from lesser known colleges where they were stars.

On the other hand, the “positive peer pressure” of being in a selective college can bring out the best in a student. As long as you don’t borrow a fortune, a rising tide can lift your boat. Caveat: High-quality colleges are often expensive, but high price doesn’t always mean high quality. Look where the money is going: Instructional costs or fluff? 

At most schools, the tuition goes up, but so does the discount rate. Colleges assume you know something about how the game is played. So make sure you do.

Dr. Alex Chediak (Ph.D., U.C. Berkeley) is a professor and the author of Thriving at College (Tyndale House, 2011), a roadmap for how students can best navigate the challenges of their college years. His latest book is Beating the College Debt Trap. Learn more about him at www.alexchediak.com or follow him on Twitter (@chediak).