Derek, that may be the case in the States but over here many schools are struggling. Not enough investment from the government (while MPs simultaneously increase their own salaries way above inflation, but I'm not going to get started on that ;)).
The trouble is that since schools don't generate revenue the decision to give them discounts or not often relates to the price of your product in the first. For example, we sell our main product for £2000 a unit. This is way more than schools and hospitals can afford and so they get a sizable discount. However, if we were selling something like Winzip at say £30 per unit then there'd be less need to discount.
And of course you have to consider the implications of getting more people using your software. To again use the company I work for as an example, our software is used both in schools and universities and in real world companies. We have around 80% market share in University stations and we are increasingly finding this is benefitting us since as these students move into the commerical stations they are pressing to use things they are familiar with.
So basically the decision to discount or not should be based on how much you think you can get away with charging them full price and the potential benefits of getting your product used early.