I only brought up the Gladwell post to clarify the scale at which these institutions operate. There is no question that they have the money, and, if they chose,

I only brought up the Gladwell post to clarify the scale at which these institutions operate. There is no question that they have the money, and, if they chose, could sustainably provide scholarships to some subset of the particularly meritorious. Nothing stops them from soliciting donations for a new merit fund just as they do for their chairs and libraries. I'm not saying everyone deserves a merit scholarship—but if the point of university is to nurture the best and brightest, then the best and brightest shouldn't have to pay such exorbitant fees. Afterall, they're the reason the colleges maintain their sterling academic reputations. If you have a household income of 250k—of which your take home is ~160k—and Columbia subtracts another 90k, that leaves you with 70k to pay for everything else. In expensive locales, that's not nearly enough to pay for the education of two children without mortgaging your house. If said best and brightest are unable to attend due to such circumstances, a merit scholarship seems in order—otherwise, you, as a college, are admitting that money means more to you than education, and that you're willing to take someone who isn't nearly as good (there's a reason you didn't admit them initially) simply because they're capable of paying. Not everyone who is admitted can afford to attend at the price of admission demanded by these colleges. Again, I speak from experience.