15 Economo has it right.
The flattery part of the pricing model is much less important.
What’s most important is to be able to charge different prices to different people so as to maximize the overall goals of the school – revenue, full enrollment, acceptable academic quality, etc. It’s mostly about price discrimination. Exactly like how everyone on an airplane flight pays a different price.
If you charge everyone the same every day one low price, you lose a lot of control over who will wind up enrolling.
At some point the discounting does get ridiculous. Like the Jos A Bank ads – buy one suit full price and get seven for free!! At the sily levels, the transparent pricing alternative would seem to have some appeal. But so far there’s little evidence of schools using that model successfully.