My institution developed a generous scholarship policy over the last decade. Now the pipers have to be paid; state law has limited the percentage of tuition revenue that can be spent on scholarships, and in order to comply, the scholarship budget has to be cut by half.
Our administration has repeatedly and publicly said that we don't need to buy students. We have a great university with great programs; students should pay to come here.
In general, I agree. But there are some categories of student that won't pay. If we want them, we will have to pay. That's just a fact. The highest-performing high school students will not come here without scholarships, because they can command quite handsome prices. Why would they sell themselves short? Our regional public university, no matter how wonderful a place, will not be able to attract them at full price or even half price, when there are many institutions in and out of state willing to buy them at the MSRP.
It sounds logical that a university should not have to buy its students. But would you say the same thing about a football program? Would you assert that we have such a wonderful team that potential athletes will gladly pay to be a part of it? The fact is that if you want top athletes, you must pay for them with scholarships. Nobody would argue differently, because it's patently obvious. If you want a marching band, you must pay for it with scholarships. (That may not be widely known, but it is true.) Would you say that you don't have to pay competitive salaries for top faculty because we have such a wonderful university that people should be glad to come here regardless of their compensation?
Quality costs money, because quality is in demand. That goes for top students just as it does for top athletes and employees. The question before my institution is not "do we have to pay for students?" It's "what students are worth paying for?" And if the answer truly is "none," then exactly what does the assertion that we have a wonderful university that's attractive on its own mean? Can you point to a high-quality university that doesn't have any top-tier students? Those students enrich faculty life, which keeps morale high and turnover low. They win top national awards and provide tangible evidence of the desirability of the university's education -- which in turn attracts more high-quality students.
Students worth paying for attract other students who pay their own way. Success breeds success. The rich get richer. And an attempt to have an unquantifiable "quality" on the cheap might end with the institution poorer than it was before it started trying to save money.