The University of Texas at Austin is ending participation in the National Merit Scholarship Program, the largest single campus departure in years from the program, which enjoys considerable prestige in some circles but is controversial in others. The university plans to shift the funds to need-based aid.

Last year, Texas was second only to Harvard University in the number of National Merit Scholars it enrolled (281). Some of the scholarships in the program (and all of those at Harvard) are sponsored by companies and other groups, but 213 of those who enrolled at Texas were sponsored by the university, which in recent years has sponsored more of the scholarships than all but a few other universities. (Last year, the University of Southern California sponsored more, 216 -- most colleges don't even top 50.)

The move by Texas comes at a time when some are criticizing the awarding of merit scholarships (and not just through this program) when so many students have clear financial need. Further, some admissions leaders have been criticizing the National Merit Scholarship Program for its reliance on PSAT scores -- and only PSAT scores -- to establish semifinalist status. There is a wide consensus among educators -- including the College Board, sponsor of the PSAT -- that standardized test scores alone shouldn't qualify or disqualify students for scholarships. (That consensus is in some cases more philosophical than operational, as the cooperation of the College Board with the National Merit Scholarship Program suggests.)

In the case of Texas, the decision was based not on concern about testing, but on a desire to focus more aid on students with need.

"We took a look at the economy, and the need level of our student body is up quite a bit. So we decided we needed to redirect the resources so UT stays accessible to everyone," said Thomas G. Melecki, director of student financial services at the university. Texas awards scholarships worth $13,000 over four years to the merit scholars it sponsors through the program (and will keep commitments to all who have been admitted through those starting this fall).

Melecki noted that only about one fourth of the university's National Merit Scholars even bothered to apply for federal financial aid, suggesting most of them don't need the money.

Historically, colleges that have invested heavily in the program have boasted about attracting students with good grades and very high SAT scores (since only those who did very well on the PSAT get considered). Melecki said he wasn't worried about losing talent because "our reputation is going to carry the day." The University of Texas does have other merit scholarships, and some of the students who might have received funds through the national program can still apply for them, he noted.

Further, the university has strong need-based aid programs -- which this shift should bolster -- for the minority of National Merit Scholars who do have financial need.

A spokeswoman for the National Merit Scholarship Corporation said that the organization would have no comment on the move by Texas, but that it planned to talk to Texas officials soon. The last major withdrawal from the program was the University of California, which had been awarding 600 scholarships among six of its institutions until 2005. In the case of the University of California, officials cited the reliance on standardized tests, saying that "using the PSAT exam alone to eliminate the vast majority of test takers from National Merit Scholarship consideration is inconsistent with the principles that standardized tests should be used in conjunction with other factors in measuring merit and that major decisions should not be made on the basis of small differences in test scores."

In April, the National Association for College Admission Counseling announced requests it had made asking the College Board to explain why it has done nothing about the use of the PSAT as the sole qualifying test for National Merit Scholarships, and to the National Merit Scholarship Corporation about why its policies run counter to the stated policies of the College Board and the new NACAC report. Both groups brushed aside the request.

Robert Schaeffer, public education director for the National Center for Fair & Open Testing, a critic of standardized testing, said the Texas decision was "very significant" because it has for so long been one of the major participants in the program. He predicted that for the reasons Texas and California left, others would follow and said that the testing program runs "the risk of losing more sponsors -- as well as their remaining credibility -- if they do not overhaul their unfair selection process."