Before World War II, academically excellent students from families unable to afford college for them could apply for scholarships available to outstanding students, but scholarships were scarce. The federal government itself did not then make direct grants to individual high school students to enable them to attend college, as it does now. Thomas Jefferson would doubtless have approved of scholarships to provide educational opportunities to high-ability students to attend, maybe even federal scholarships. In the course of advocating scholarships for able youngsters at the University of Virginia, Jefferson had written, "By that part of our plan [of education in Virginia] which prescribes the selection of the youths of genius from among the classes of the poor, we hope to avail the State of those talents which nature has sown as liberally among the poor as the rich, but which perish without use, if not sought for and cultivated." 
It is unlikely that Jefferson would have favored financial aid to students of lesser abilities. And he probably would have been astounded by "athletic" scholarships. His proposal sought students who were intellectually outstanding. Athletic scholarships are not merit-based scholarships in the Jeffersonian sense of rewarding intellectual achievements and potentialities. Varsity athletes who receive scholarships are merely expected to improve the competitive performance of intercollegiate sports teams. Yet athletic scholarships do not break completely with meritocratic values; athletic scholarships are awarded on the basis of previous personal achievements in football, basketball, soccer, or other high school sports, and these achievements require diligent effort as well as native ability. Faculty and students always knew that athletic scholarships existed, but athletic scholarships appeared to be minor deviations from general practice; and some elite universities such as Harvard, Yale, and Princeton didn't have them at all. In short, winning a scholarship meant substantial previous academic achievement to most people.
The Shift from Scholarships Based on Academic Achievement to Federal Financial Aid
The federal government initiated the shift from "scholarships" to "financial aid" during World War II. On June 22, 1944, President Franklin D. Roosevelt signed The Servicemen's Readjustment Act of 1944—commonly known as the G.I. Bill of Rights—one provision of which gave veterans financial resources to attend college. This provision was an expression of public gratitude, not a congressional attempt to change the basis for admitting students to college. Although the bill as a whole was controversial, the educational benefits were not; World War II was ongoing both in Europe and in the Pacific, with the outcome still uncertain. Meanwhile American troops were dying in combat—ultimately more than 400,000 died, and many more were wounded. 
Jackson Toby is an adjunct scholar at AEI