Take a look at other printers in your area and see what their prices are like. If you can afford to be a little bit cheaper, go for it. You're providing a service, don't worry about what the school is charging for the completed product - you only need to worry about what your services cost.
Also, not to be a doubter, but why is everything going through this guy? Are you sure that he's not taking your price and marking it up before he speaks with the school? Why not have him refer jobs to you and take a cut if he wants. It's your business, you should be dealing with the customer directly.
Just my .02
