Merit vs Need Based Scholarships

I’ve been thinking a lot about the debate around merit-based vs. need-based scholarships.  For centuries, students have been rewarded with scholarships based on attaining high levels of academic achievement.  Sure, colleges and sponsors would help  the “less fortunate,” but as of 2007, the majority of private scholarships (about 75%) used “merit” as their main qualification.  However, as more college access programs have opened the doors of academia to a broader population, students of modest means have had a chance that historically was reserved for people with money.  Should these cash-strapped students pay their own way like their more-advantaged counterparts or should some of this “merit” money be re-directed to the people who actually need it?  What if you are an exemplary student but you’re not considered low-income?  Should the money that would have been allocated to you go to someone who doesn’t possess 4.0 gpa but they are only held back my limited financial resources? 

I’m already noticing a shift among people that would probably not have considered themselves “low-income” a year ago but may consider it now based on how they have fared during the recession.

What do you think?