The 1990s ushered in a new age in state financial support for college students, with the rise of broad-based merit scholarships. Starting in the South and spreading from there, the premise of the "new generation" of programs was simple--states should be in the business of rewarding student performance, retaining the state's "best and brightest," or both. From 1990-91 to 2001-02, the share of state student aid awarded on criteria other than financial need jumped from 12 percent to 24 percent. However, the recent economic downturn and accompanying fiscal crisis, however, appear to have blunted the new generation's momentum, at least somewhat, as suggested by development in several states. In this article, the author presents these developments.