In the guidance office, I talked with several MHS students who have received scholarships. Many of these students receive $20K or more. Does the amount of the monetary award show academic ability or price discrimination?
I will venture that the marginal cost of educating an additional student is zero. In other words, if there are two students in a room or 100 the cost is the same. But among each student is a different ability to pay and various benefits. The college wants to maximize its revenues, so it simply offers scholarships to find the highest tuition a student will pay.
Granted, many students are deserving of a scholarship and the awards also attract the best talent. But, if the goal is to accrue as much total revenue for the college, then the college will find it profitable to give scholarships as long as the price paid by the student is greater than the cost.
A recruiter from NIAC, Ft. Dodge, Iowa, told me that all he has to do is offer a $100 "Scholarship" to a potential athlete to get that student to sign a letter of intent. Clearly, this is testing the student's ability to pay by decreasing the tuition price in small increments.
As with a business, a college's goal is to maximize profits.