It is not true that schools do not have merit scholarships or that merit scholarships come only from outside sources. If you want the full information on sourcing scholarships at a university you might need to read not just the financial aid webpage, but the admissions office webpage. Sometimes the merit scholarships are handled through admissions, not financial aid.
I was also surprised to learn that my son's school has one program to offer additional money
exclusively to people who do come with 529 savings. It as though one gets a boost for having been responsible about saving. When parents set their eyes on the 529 savings goal, they can also set their eyes on gathering that 529 supplement.
Yesterday my state legislature was scheduled to pass the funding bill for state colleges and universities: Billions of dollars. I need to check on what they did, as I did not read the news at the end of the day. Personally, I think higher education is one of the things I am happiest to join the social compact to provide for.
(I just want to mention that "Ivy League" does not mean just any very high quality school. It means only Yale, Harvard, Princeton, Columbia, Dartmouth, Cornell, the University of Pennsylvania, and Brown. Obviously there are
world leader schools in this country beside the ivy league schools.)