Universities offer merit awards to students who ordinarily would not qualify for other financial help.Some have criticized this on grounds that merit awards disproportionately benefit students from wealthier communities with better school systems, siphoning resources away from lower-income students with greater financial need.A university's decision to grant merit awards is motivated by economic efficiency.

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Merit awards are granted to students based on their academic or other achievements, regardless of their financial need. This means that students from wealthier communities with better school systems may be more likely to receive these awards, but this does not necessarily mean that they are disproportionately benefiting from them. Additionally, universities may offer a mix of need-based and merit-based financial aid in order to support students with differing levels of financial need. Ultimately, a university's decision to grant merit awards is often motivated by a desire to attract and retain high-achieving students, which can benefit the institution economically.

Universities Offer Merit Awards to Students Who Ordinarily Would Not