Colleges

Merit-Award Analysis: Increasingly popular state merit-based scholarship programs widen the gap between rich and poor by wasting precious funds on students from middle- and upper-income families who could pay for college with their own money, a report by a leading higher education group says.

Such aid, which rewards achievement rather than financial need, is also unfair because it fails to note that students from poor families must overcome greater hurdles to perform well in school, according to the report released last month by the American Association of State Colleges and Universities, based in Washington.

"State Student Financial Aid: Tough Choices and Trade-Offs for a New Generation" finds that despite relatively attainable eligibility standards, "all high school students do not enjoy the same probability for earning or retaining new-generation scholarships, especially those programs with grade threshold for...