'Tis the season when high school seniors reach a fever pitch of agony over their college applications, and parents reach new lows of gloom about paying the freight, especially if the child is looking at out-of-state or private institutions.

It is also a time when some families go to amazing lengths to try to maximize their offspring's chances of gaining admission to the school of their choice--even hiring consultants to help make sure that the application documents present their child in the best possible light and that the required essays are phrased just so.

But while families are throwing themselves on the doorsteps of Ivy League and other name-brand schools, other colleges are locked in a bitter marketing war, trying to win the best and the brightest away from the Harvards and the Yales.

The schools in this war include not only lesser-known private colleges, which have been fighting these battles for years, but also a growing number of large public universities. These public schools are eager to boost their own prestige, which helps them gain support with taxpayers and legislators, and to help persuade bright students to stay close to home for school and ultimately live and work in the state.

It isn't "limited to smaller, less highly regarded colleges," said David W. Strauss, a principal of Art & Science Group Inc., a Baltimore consulting firm that, among other things, helps colleges figure out how to improve their enrollment. "It has been in play in larger private institutions and at one level in public institutions [before now], and it will grow. Public institutions have the same desire to enroll a more highly qualified applicant pool.

"As more schools have competed using aid dollars, the intensity of the competition has gone up," he said.

"The other aspect of it is, this is not just a use of merit aid. It's also need-based aid. As the cost of college has outstripped family income . . . aid has become a competitive tool."

The scholarships available to top students range from substantial tuition discounts up to full rides plus spending money--benefits that even top athletes might not get.

And the new scholarships are typically not "need-based," meaning that having a moderate or even high family income does not disqualify an applicant. This aims them squarely at the middle class, families who find Ivy League tuitions tough to pay but may find the aid packages offered by those schools short of what they think they need.

For example, the University of Arkansas recently sent out fliers to 13,000 high school seniors with Scholastic Assessment Test scores over 1350, inviting them to apply for one of the school's Sturgis Fellowships. Eleven of these are awarded each year, and each "covers the cost of tuition, room and board, and books, provides discretionary funds for the purchase of computers and journals, and helps pay for travel abroad during the junior year," according to the brochure.

Casting a broader net, Rutgers University has just established a scholarship program for students who live outside New Jersey. The school will knock $4,500 off its $9,700 out-of-state tuition for incoming students who scored 1250 or better on their SATs and were in the top 10 percent of their high school classes.

Some state schools, of course, including the universities of Virginia and North Carolina, have had generous scholarships for top students for a number of years, but experts say changing demographics and economics in higher education have fueled the spread of such aid.

Some recent research has found that local and regional schools are having more trouble getting top high school graduates. These graduates, some of whom in the past would have gravitated naturally to a nearby school, now are much more aware of their options and more likely than in the past to go off to a "name" school if they can.

In other cases, schools in states with slow population growth are seeking ways to attract more students from outside their borders because they face a shrinking pool of applicants among their populations.

Targeted giving, the fastest-growing category of college donations, also plays a role, as wealthy alumni and other benefactors find it rewarding to have programs for top students named after them.

At the same time, many colleges, under financial pressure, are abandoning "need-blind" admissions and instead taking ability to pay into account when deciding whom to admit. Often these schools then use the extra revenue supplied by the additional paying customers to sweeten aid packages offered to their brightest applicants.

Perhaps not surprisingly, schools report that the economic incentives are effective. And they also say that having a cadre of very top students helps attract other bright applicants.

At Arkansas, enrollment in the Honors College, a special program limited to good students, has leapt from 200 to 1,005 since the advent of the Sturgis program, which was endowed through a gift to the school about a decade ago, said Suzanne McCray, associate director of the honors studies program.

Dallas Martin, president of the National Association of Student Financial Aid Administrators in Washington, said that scholarships based purely on merit remain a much smaller component of institutions' overall aid but noted that studies are finding that a higher percentage of new aid dollars are going into merit-based programs.

"I think some of this is just trying to compete with other institutions," he said, noting enrollment of students with higher SAT scores will improve the school's profile in many college guides, "and that will attract other students in the future."

The growth of merit-based aid, especially by public institutions, raises important policy questions.

Strauss said studies show that the families of students at flagship state universities already tend to be better off than the families of students at private colleges.

"If you're already aiding the middle class by using tax dollars to bring down the cost of the public institution," should you be providing further subsidies through merit-based aid? he asked.

And Martin said he hopes that schools will not use so many of their resources to woo top students that less affluent applicants suffer.

"It's fine to reward people and give credit to the best and brightest, but at the same time I hope we don't go too far and deny aid to those who would not go without financial help," he said.

For top students from middle-class and well-to-do families, though, the trend means a chance to save a lot of money--if they choose to.

"There's a bidding war going on," Strauss said, both by schools looking for students and by students shopping their offers around to try to get better ones.

Absent government intervention, he said, "all of this is pointing toward a situation where the smarter you are, the cheaper it will be to attend a [less desirable] school," or, put the other way, "the more it will cost to attend an institution you [prefer] to attend."

"That is pretty much like any other transaction in American life," he added, and while we tend to think of education as somehow different, at bottom "it's a transaction."

Students and their families will have to figure out how much of a discount it will take to get them to a less prestigious school, or, put the other way again, how much of a premium they are willing to pay for the name brand.