Merit based financial aid awards have becoming increasingly prevalent in the pricing policies of higher education institutions. This study utilizes an experiment to estimate the efficacy of merit aid awards in achieving the institutional objective of attracting the most academically desirable applicants. Additionally, the experimental setting of this paper allows for a test of whether students respond to the framing of price in making enrollment decisions (i.e. price illusion), holding net price constant. I find that merit aid has a statistically significant but inelastic effect on enrollment of high ability students, and there appears to be weak evidence of price illusion, particularly among female applicants.