The Merit-based Educational Reforms and Institutional Transparency Act, or MERIT Act, seeks to amend the Higher Education Act of 1965 to reform admissions practices in higher education. Its primary provision requires that the standards for accreditation of institutions of higher education assess whether these institutions adopt admissions practices that refrain from any manner of preferential treatment for applicants based on their relationship to alumni or donors. The bill specifically defines "preferential treatment" as an admissions decision or the awarding of tangible educational benefits where an applicant's relationship with an alumni or donor is the determinative factor. However, it clarifies that institutions may still consider an applicant's demonstrated interest if the criteria are public, applicants can explain their interest, and opportunities are equally accessible to all. Furthermore, the bill protects the right of religious institutions to make admissions decisions consistent with their faith-based values. To ensure compliance, the Secretary of Education is mandated to submit biennial reports detailing efforts to enforce these new requirements, including technical assistance, regulatory guidance, and compliance monitoring. The bill also authorizes a feasibility study within two years to explore establishing a third-party method, potentially with the National Student Clearinghouse, for collecting institution-level data on the impact of alumni and donor affiliations on admissions decisions. This study will consider data accuracy, policy transparency, integration with existing data systems like IPEDS, and maintaining confidentiality while separating familial ties from direct donor affiliations, without creating a nationwide database of personally identifiable information.