Schools give two types of scholarships: need-based scholarships that go to the lowest-income students, and merit scholarships that go to the smartest students. A report from the New America Foundation finds schools are increasingly using their money on merit scholarships. Steven Burd authored the report, and he says this trend means more money is going to those who need it the least. Over at our On Campus blog, Kirk Carapezza talked to report author Stephen Burd:

CARAPEZZA: The results of your report show that colleges and universities are shifting more towards merit aid. Why is that?

BURD: Two reasons. One to get the best and brightest students so they can rise up the rankings and two they are going after the wealthiest so they can increase their revenue.

CARAPEZZA: You single out Northeastern, and you say that it's giving more of its financial aid to affluent families. What are Northeastern and other universities getting wrong?

BURD: Northeastern is an institution that has been singularly focused for the past couple decades on rising up the U.S. News rankings. And as part of that effort the school has used its institutional aid dollars to aggressively pursue high achieving students and a more upscale student body. Their generous merit aid policies have left some students out in the cold, namely low-income students.