The college spends 5% of its 21 million budget on merit based aid and awards merit scholarships to about 15-20 first year students. The aid takes care of about half their tuition costs.. According to Monica Inzer, dean of admission and financial aid, the new policy will reallocate about $1 million each year for additional need based aid. This policy will affect only a few students, but it comes at a time when colleges have been criticized for luring high-achieving students by offering them merit scholarships.

Inzer said that demographers predict that student in the future will require greater financial assistance and colleges must prepare to tackle that situation.

Some schools like George Washington and Dickinson college have reduced their budgets for merit based scholarships, but Hamilton seems to be the first one to terminate it.

The total amount of merit based scholarships grew six times from 1994 -2004 while the pool of need based aid only doubled. One of the biggest drawbacks of merit scholarships is that it favors the privileged, who have better resources for preparation.

The need verses merit debate has been has been going on for years and this move by the small but well regarded institution, has won praise from educators who hope that other colleges will get inspired and follow suit.

Rachna Mehra is a freelance writer from NYC, New York. For more information on scholarships and financial aid, visit http://www.freescholarshipguide.com