I’ve heard of the high standards to maintain a scholarship in some law schools, and I’ve advised students who are looking at those law school scholarships to ask what percentage of recipients maintain them for all three years. The answers would lead me to believe the schools are offering them to lure students in with the expectation that many of those students will be full pay after first year.
My daughter had one undergraduate scholarship (a small one; her full tuition scholarship required a reasonable 3.0) that required an A- in every class in a particular minor. It was a risk we were willing to take because it was $5K a year, not full tuition, and we could cover it if it was lost, but it turned out that the courses in that minor were graded such that an A- was a reasonable threshold. I think one needs to be very careful with the renewal requirements of merit scholarships if the school is unaffordable (or would not be an attractive choice) without them.