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<p>Yes, and what you are describing represents a very distorted market for college admissions and aid. By “distorted market”, I mean something like the old Soviet market for cars and washing machines. It is not regulated rationally by supply and demand, or entirely by merit. </p>
<p>The basic problem is that too many highly qualified students are clamoring for spots at the same 50, or 100, of the most selective colleges and universities. Almost all of them were founded prior to 1900, some of them even in the 1600s and 1700s. We are not building enough new universities to keep up with demand (because we are squandering our national wealth on a lot of other crap). So, the schools resort to all sorts of distinctions that have little or nothing to do with real intellectual merit.</p>