Why do colleges offer merit scholarships?

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I think U Miami is worth mentioning in this thread (FL not Ohio)… It’s #38 and offers a LOT of merit aid. </p>

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At UM, about 7 students get full rides (courtesy of the Stamps foundation which contributes to a handful of Universities across the nation), and I think maybe 75 get the Singer scholarship which covers full tuition for four years. These are per class (out of about 2k). Then there are the scholarships that they offer with admission. I believe the increments are $8k, $11k, $20k, and $24k. They are based purely on stats and the application’s contents, they come with the acceptance letter. </p>

<p>Miami’s reason for all the merit scholarships is that it is one of the most up-and-coming universities, having made the biggest jump in rankings in the shortest amount of time (not attributed to changes in ranking formula). And by offering this merit money to good students who are likely getting into even more prestigious schools, they just may commit to UM and there begins the domino effect that leads to a good student getting a good job with a lot of money and donating back to the institution.</p>