| Clarification
I appreciate the debate but not the "gotcha." The relationship between merit and need is confusing, but "covert" suggests we have an intentional institutional practice of favoring needy students for merit aid. We don't. This was clear in my original blog post (I hope).
As the website suggests, direct information about family income is not available to Rochester's merit scholarship reviewers. The correlation I was reporting was part of a model I constructed analyzing results months after both merit awards and need-based aid had been (independently) offered. The model showed that needier students were on average more likely to have earned larger merit awards from the committee review process. I expect this result reflects the sympathy most reviewers might have for students whose essays and letters of recommendation describe tougher life circumstances. You don't have to see a tax return to admire someone who has both achieved in school and comes from a single-parent home, or will be the first in the family to attend college, etc.
Given counteracting forces at work too (e.g. the consistently documented positive correlation between income and test scores), the detectable final amount of difference in our merit awards' negative correlation with income was small. A family with income in the $100,000 - $250,000 range, which represents a significant share of our merit winners, wouldn't notice the "tax" I had detected.
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