The case was settled in 1993 when the colleges agreed to stop swapping financial information about their applicants. Still, they insisted they would strive to confine aid to those who were in need. At first, the collapse of the scholarship cartel seemed a good thing. In fact, market forces had been at work in college admissions for at least a couple of decades among the less competitive institutions, some of which needed to charge lower prices just to fill their classrooms. Ironically, the most selective colleges, often those that can best afford to give money away, benefit from a kind of Chivas Regal effect, in which buyers are willing to pay for cachet.
Most colleges play the merit-scholarship game with stealth.
Now the game is getting even more complicated. The winners are the highly placed, high-income kids. And the disparity will only get worse. If the tuition wars spread further, that diversity will suffer. But if as a result we're not able to build new buildings or pay professors, it will cost us our future.