I can't find a given reason anywhere.
D3 schools don’t give athletic scholarships because of how they’re structured. In the NCAA’s Division III system, athletics are meant to be more about balancing sports with academics rather than being something students are recruited or paid for. Instead of offering money for playing a sport, D3 schools focus on academic and need-based financial aid for all students, including athletes. You can still get scholarships at a D3 school, but they can’t be tied directly to being an athlete. I hope this helps!
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Thank you! I had heard that it was because of the athletes in D3 sports not being considered "Good Enough", and I wanted to check before I actually said anything to the person who told me that.