Some students pay less because their finances make it difficult for them to pay. Others, who could pay full price, pay less because the institution wants to provide an incentive for them to enroll there instead of elsewhere.
This idea of “tuition discounting” is not a bad thing. Many highly selective institutions have long waiting lists of students willing and able to pay their sticker prices; however, these institutions want to enroll the best students they can and many of those students can’t afford to pay. Other institutions would have empty seats if they did not discount so generously; if they lowered the sticker price enough to fill the class, their total revenues would be too low to operate. By meeting as closely as possible each student’s willingness and ability to pay, institutions are able to attract a variety of students and stay operational.