Rankings are a big deal to colleges. By earning a place on a News and World report top 10 colleges list, higher education institutions will have students flock to it from just about every corner of the planet, and thus, an assurance of tuition and financial aid awards for the college’s coffers. But recent times have seen colleges take a new approach called “high tuition/high discount,” where colleges lure the best and brightest students by offering large, merit based scholarships, which in turn require increased tuition to pay for.

Now, one college president has questioned the sustainability of this practice. According to S. Georgia Nugent, president of Kenyon College, merit scholarships are great if you can get them, but in the end, the need to raise tuition to fund the scholarships is doing more harm than good.

“This is not a healthy situation if what we are trying to do is utilize the limited resources that we have to educate students,” said S. Georgia Nugent, president of Kenyon College.

At a recent meeting with other college presidents, Nugent handed out a document entitled “HIGH TUITION/HIGH DISCOUNT HAS NO FUTURE,” which included the following statements:

We believe that a financial model based upon the traditional “high tuition/high discount approach to fee setting is unsustainable”

We believe that “discounting” has led to an allocation of financial aid resources that is neither efficient nor just and has contributed to the rising cost of higher education.

We believe that “merit financial aid” as presently understood is in fact “non-need financial aid”

While the official policy itself is still being drafted, in essence, Nugent is calling for the abject dismissal of high tuition/high discount due to one glaring problem: the students getting the scholarship money are almost never the ones who need it.  Students who often receive merit based scholarships from one institution are increasingly likely to get other offers from other colleges at varying amounts.

“I can give you the example of a student who applied to Kenyon, who we evaluated to have no need based on the assets of the family, ” said Nugent. “The family then wrote back to us to tell us they had four other offers from other schools offering aid from $10,000 to $40,000.”

According to Nugent, “bidding wars of merit aid” like these are becoming more and more common, and it means that multiple colleges competing over one student inevitably leaves a multitude of other students, ones who can’t get merit based scholarships but often need financial aid the most, out in the cold.

Nugent says other presidents are aware of the problem, but get them to act on it has been is where the real problem lies.

“It’s the prisoner’s dilemma,” Nugent says. “Typically in conversations presidents will says ‘Yes, I agree. I don’t want to provide financial aid to families that don’t need it. But I can’t afford not to do this. If I don’t this, the state university down the road will eat my lunch because they are doing it.”