Near the turn of the 20th Century the then-president of Harvard, Charles Eliot, was in the midst of a dispute with a member of Harvard’s Board of Overseers, Charles F. Adams, Jr. — one of John Quincy Adams’ grandsons and member of a long line of Harvard graduates.

On June 9, 1904, Harvard’s president, Charles W. Eliot, wrote a letter to Charles Francis Adams Jr. A former railroad executive, Adams was a member of the college’s Board of Overseers and, as a grandson of John Quincy Adams, a multigenerational Harvard legacy.  The dispute had arisen over whether to increase Harvard’s tuition in light of financial woes the school was experiencing at the time.  Eliot famously wrote to Adams:

You wanted the College open to young men who had either money or brains. … the College [should be] open equally to men with much money, little money, or no money, provided they all have brains. … I… think that you would be more tolerant than I… of stupid sons of the rich.

Eliot won the argument he was having with Adams and the rest of the board, managing to keep the tuition at Harvard unchanged for a dozen years. Yet, his legacy did not survive into the 21st century. Indeed, private colleges and universities across the country are frittering away millions of financial aid dollars every year as they compete for the attention of the — ahem — less than brilliant children of the affluent.

As readers of this blog — and pretty much anyone who’s looked into college — know, there are basically two types of financial aid out there: need-based and merit-based. The former is pretty much what it sounds like: students with talent but lacking in financial resources get help to attend college. The latter, as reported elsewhere on this site, is pretty hard to come by these days. Unless you happen to come from a well-off family and aren’t necessarily college material.

While far less common than they used to be, “real” merit based scholarships do still exist. Some schools use them to attract students whose high test scores on the ACT or SAT will help move them up in the annual college rankings published by a handful of influential magazines, most notably U.S. News & World Report.

Other financial aid funds, that are reserved by schools for use as “merit-based” awards are actually used as carrots to lure in mediocre students with wealthy parents. Picture this scenario: a college with a need-blind admissions policy receives a large number of applications from good students who will end up needing some form of financial aid. They also receive a handful of applications from students who would not otherwise make the cut academically but whose parents could easily afford to foot the bill for tuition.

So, rather than denying the mediocre student outright, they offer him a small scholarship. Five, maybe even 10, thousand dollars. The parents, surprised and flattered that a college finally recognized their child’s innate brilliance, pack Junior off to school and happily pay the balance of the tuition. For four years. So rather than tapping the endowment for a genius, the school just spent five or ten grand to net $150,000 to $200,000 in tuition revenue over a four-year period. All they have to do now is get Junior a degree.

According to the Chronicle of Higher Education (where the idea for this post came from),

 A 2012 survey of affluent students and parents asked, “Which attributes would make me consider a school that was not my first choice?” The No. 1 answer was “Offers good scholarships and financial-aid packages.” While there is no universal definition of merit, a U.S. Department of Education study in 2011 found that nearly 20 percent of full-time students at four-year institutions who were receiving “merit” aid had entered college with a combined SAT score below 700. Forty-five percent had scored below 1000.

As much as we enjoy the idea that college students represent our best and brightest, and the best and brightest deserve to be rewarded for their hard work, the fact remains that the mediocre are where the dollars lay. Academically less-desirable students are simply more profitable — even if they drop out — than bright students who have many more choices of schools and aid packages.

I suppose that what a school does with its endowment is its own business. But could we call it something other than “merit” aid?