Merit aid, which benefited about 75 students a year, or about 4% of its student body, at a cost of about $ 1 million a year, “served us well,” Inzer says, but “to be discounting the price for families that don’t need financial aid doesn’t feel right any more.”

　　Need-based aid remains by far the largest share of all student aid, which includes state, federal and institutional grants. But merit aid, offered primarily by schools and states, is growing faster, both overall and at the institutional level.

　　Between 1995-96 and 2003-04, institutional merit aid alone increased 212%, compared with 47% for need-based grants. At least 15 states also offer merit aid, typically in a bid to enroll top students in the state’s public institutions.

　　But in recent years, a growing chorus(异口同声)of critics has begun pressuring schools to drop the practice. Recent decisions by Hamilton and others may be “a sign that people are starting to realize that there’s this destructive competition going on,” says Baum, co-author of a recent College Report that raises concerns about the role of institutional aid not based on need.

　　David Laird, president of the Minnesota Private College Council, says many of his schools would like to reduce their merit aid but fear that in doing so, they would lose top students to their competitors.

　　“No one can take one-sided action,” says Laird, who is exploring whether to seek an exemption(豁免)from federal anti-trust laws so member colleges can discuss how they could jointly reduce merit aid, “This is a merry-go-round that’s going very fast, and none of the institutions believe they can sustain the risks of trying to break away by themselves.”

　　A complicating factor is that merit aid has become so popular with middle-income families, who don’t qualify for need-based aid, that many have come to depend on it. And, as tuitions continue to increase, the line between merit and need blurs.

　　That’s one reason Allegheny College doesn’t plan to drop merit aid entirely.

　　“We still believe in rewarding superior achievements and know that these top students truly value the scholarship,” says Scott Friedhoff, Allegheny’s vice president for enrollment.

　　Emory University in Atlanta, which boasts a $4.7 billion endowment(捐赠), meanwhile, is taking another approach. This year, it announced it would eliminate loans for needy students and cap them for middle-income families. At the same time, it would expand its 28-year-old merit program.

　　“Yeah, we’re playing the merit game,” acknowledges Tom Lancaster, associate dean for undergraduate education. But it has its strong point, too, he says. “The fact of the matter is, it’s not just about the lowest-income people. It’s the average American middle-class family who’s being priced out of the market.”

　　*A few words about merit-based aid:

　　Merit-based aid is aid offered to students who achieve excellence in a given area, and is generally known as academic, athletic and artistic merit scholarships.