The problem is that many people think of merit awards that colleges provide as prizes for doing well at school, but they aren’t. Merit awards are there to attract academically accomplished kids to their college. The higher the median GPA and tests scores that a college has, the less it has the need to offer incentives for these students. What they do feel that they need are highly accomplished students from low income families, who cannot afford to attend more expensive colleges.
Basically, as the academic accomplishments of the students who apply to a college increase, the college starts shifting from providing incentives for students who otherwise wouldn’t attend to students who otherwise couldn’t attend.