Financial assistance for individuals attending college has existed in this country almost as long as higher education itself. Institutions awarded many of the earliest scholarships based on students' academic merit, with consideration often given to financial need. This practice was carried into the twentieth century, largely by private elite colleges and universities in the East. Recognizing the inequities of this system, and the lack of a common method for determining financial need, institutions banded together in 1954 to establish the College Scholarship Service (CSS) as part of the College Entrance Examination Board. The CSS developed a common formula to help institutions determine the financial need of their applicants, after which most private institutions began awarding scholarships based solely on financial need. In the 1990s, however, colleges and universities, like states, began to increase the proportion of scholarships they awarded on the basis of merit. The funding for these awards usually originates from one or both of two sources: endowed scholarship funds and the recycling of tuition revenue. The growing use of merit, rather than financial need, as the primary criterion for the awarding of financial aid has important implications for college access in the United States. Research on tuition prices and financial aid over the past three decades has consistently found that, short of keeping tuition prices as low as possible, financial aid targeted at needy students is the best policy for increasing college access among underrepresented students. Merit scholarships, whether provided by states or institutions, are awarded disproportionately to students from groups that already have the highest college participation rates in the nation--white, Asian American, and upper-income students.