Earlier quoted context omitted.
This - rewarding deviousness - troubled me about the system too. Perhaps, instead of explicitly mentioning the Scholarship accounts on the homepage, there could be text along lines of "Struggling to get by and can't afford it? Email us and we'll see what we can do."
TL;DR - this is a shrewd play for a number of reasons. You don't understand, it's just business. Furthermore, the conversion of requiring people to beg via email to explain they're broke is next to zero. People won't do it. They'll take the POLR: fake accounts. Kicking them out also won't help: they can attack the brand and also if they succeed, the service looks like the bad guys. Furthermore, it builds stats by hav…
Entirely true. But it would remove the conflict of offering the scholarship option only to people who cheat, which is the whole point. They can of course continue to also offer it to those who do, just like now.