An increase in the number of students seeking financial aid has prompted the University of Texas at Austin to phase out its multimillion-dollar National Merit Scholarship program starting next year so it can use the money for need-based scholarships.
The university enrolled 281 National Merit Scholars last year -- second only to Harvard University -- and says it will honor all current scholarships but not offer them to freshmen next year.
Coming amid the recession and climbing college costs, the move by the state's largest university could signal a renewed emphasis on need-based aid by the country's colleges, experts said. Many schools have spent the past decade using scholarship money to attract high-performing students.
"This gets back to equity in college -- which should be the primary goal of student aid," said Justin Draeger, vice president of public policy at the National Association of Student Financial Aid Administrators.
The National Merit Scholarships are awards that go to about 8,200 students a year, based in part on their scores on the College Board's PSAT exam, a standardized test typically taken during the junior year of high school. The program gives winners $2,500 apiece, but corporations and some colleges also finance merit scholarships through the program. The University of Texas at Austin was one of about 200 universities that paid for merit awards, promising $13,000 over four years.
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