Well I guess you could think of it as a discount. The idea is that you join the club and pay dues - the club owns the airplanes and "rents" them to their members. The advantage being that he club only has to only cover their expenses not make a profit as an FBO does so it will naturally be cheaper than renting from an FBO. I just found the website - go to
http://roger.ecn.purdue.edu/~ppi/ and you can see about the fliying club. It looks like it's a one time $65 fee, $40 a semester, and the rate on the VFR Warrior is $66/hr vs. $76 an hour at the FBO - a difference of $10 an hour plus tax(in the flying club you're not required to pay tax) so in reality you're saving about $15 an hour by joining the flying club.
Look at this way - if you fly say 40 hours(chosen randomly) over the course of an academic year at the flying club you would incur a $40 dues charge each semester for a total of $80 plus $2,640 for rental charges($66 times 40 hours) even if you add in the one time charge of $65 initiatin fee that's a total of $2,785. At the FBO for the same amount of flight time you'd pay a total of $3,222($76/hr times 40 hours plus taxes).
There are added benefits as well - the club also usually has various activities throughout the year, etc etc.
Jason