The Detroit News. Minn. Fueling the rivalry in the past decade was the emergence of for-profit universities, including some online schools, that siphoned off students. Meanwhile, colleges became more businesslike in their enrollment decisions, said William F. Massy, president of The Jackson Hole Higher Education Group and a professor at Stanford University. Colleges now handle admissions like airlines sell seats, hiring consultants and using the principle that it's better to sell the seat at a discounted price than to fly with an empty seat, said Massy, who testified at the hearing. Colleges discount by offering merit aid, which can dramatically reduce the cost of a student's education.
Students also play a part in the competition.
The downside is that if colleges are giving more merit aid, they are giving less aid to needy students. It's not doing much for society. These kids would go to school any way. Although colleges are giving larger amounts of merit aid, they are giving it to only a few students, McPherson said. So more dollars are going into it, but not dollars to more students.