The University of Texas in Austin is opting out of the National Merit Scholarship Program, choosing to focus instead on awarding scholarships to students based on financial need. National Merit Scholars earn funds based on academic performance and high test scores. UT cited budget pressures as the reason for the change and says it hopes redirected dollars will help struggling students make it to college.

You may recall that improving SAT scores and increasing the number of National Merit Scholars was one reason given for finding a new RISD superintendent. Lake Highlands High School had 12 semifinalists in 2005 (a banner year), 3 in 2006, 0 in 2007, 5 in 2008, and 2 in 2009. UT enrolled 281 National Merit Scholars last year – only Harvard attracted more.

UT’s endowment is well in excess of $20 billion, so the changes don’t indicate a reduction in available financial aid so much as a shift in attitude on which students are chosen to receive it. Some have called the program elitist, since the scholars receive funds even if their family can easily afford to pay. The university still expects to give more than $400 million in financial aid next year.

The change comes at a time when other colleges are moving to attract more scholars. Texas Tech University recently increased their aid package to National Merit Scholars, adding a campus housing allowance to make the offer a virtual full ride. Texas State’s $10,000 per year award comes close.

National Merit Scholars you may have heard of include authors M. Night Shyamalan (The Sixth Sense) and Stephenie Meyer (Twilight), policymakers Ben Bernanke (current Federal Reserve Chair) and Robert Reich (Clinton’s Secretary of Labor), and entrepreneurs Bill Gates (Microsoft) and Jerry Greenfield (Ben and Jerry’s ice cream). TV financial guru Jim Cramer (Mad Money) and Supreme Court Chief Justice John Roberts also earned the honor.