Public universities used to be tuition free. The government funded universities. Now it just underwrites student loans. The wealthy private donors prefer the current system because their donations give them wage slaves. They also get the added benefit of having their name on a university building.

Scholarships are awards based on academic performance.

How do you figure? My department has scholarships tied to a whole lot of criteria. Many are purely need based.

Scholarships still generally have a subjective aspect, often in the form of a short essay.

As long as there are subjective measures, there is the opportunity for abuse.

Like, hypothetically if you were an institution you might want wealthy students who's parents will be inclined to donate large sums of money... and you might recognize that if the parents are in the public eye it would be attractive to them to be able to say thier kids made it on a full ride scholarship (even though thier donations would vastly eclipse any tuition costs). You suddenly have an incentive to use the subjective component of a scholarship as justification to award the scholarship to wealthy donors to ultimately profit.

Not saying that's necessarily what happened here... Just that the argument of "that's not what they're used for" is a little hollow when they're already not being used for what they're for.

Don't you need to apply for a scholarship?