File this story under “The Free Market”.

Private colleges are continuing unabated their strategy of setting high sticker prices while giving most of their students steep discounts, according to the latest survey of private colleges by the National Association of College and University Business Officers.

The colleges, many of which are struggling to meet enrollment goals, are taking in only 54 cents for every $1 they claim to charge in tuition.

The “high tuition, high discount” business model is often confusing to students and parents, but it’s how things are done at most private colleges: the colleges charge high prices and then offer students they want huge discounts. The discount comes in the form of need-based aid for low-income students and “merit” aid for students with characteristics that make them desirable to a college. At wealthy colleges, endowments may have actual funds to replace lost tuition revenue, but most colleges are just waiving the chance of getting more.

This so-called discount rate – the college’s aid dollars as a percentage of tuition and fees – is again at an all-time high.

In fall 2013, the average discount rate was 46.4 percent for first-time, full-time freshmen, according to NACUBO’s survey of 401 private nonprofit colleges. The discount rate is up from 44.8 percent in 2012 as 47.9 percent of colleges in the survey reported enrollment declines, in part due to growing concern about college costs.