NEW YORK (CNN/Money) - All of Duke's incoming freshmen received a free iPod as part of a technological experiment. Can Stanford top that?

The best and the brightest aren't just looking for the best education their tuition dollars can buy; they want cushy dorms, gourmet cuisine, and state-of-the-art facilities too. Free T-shirts and water bottle cozies don't hurt either.

Kids these days are applying to more schools -- anecdotal evidence suggests the average has shot up to roughly 10 to 12 applications, about twice as many as 10 years ago. One result has been that colleges must do more to woo potential students.

"Schools are trying to compete for those students, not just on academics alone, but the whole package they can offer those students," said Robert Franek, editor of the Princeton Review's The Best 357 Colleges. "They are competing on a much different scale then they were 10 years ago."

Merit scholarships are among the top incentives colleges are now using to entice high schoolers to enroll.

Washington College in Maryland, for example, instituted a program in 1995 that guarantees members of the National Honor Society or Cum Laude Society a $40,000 merit scholarship, spread out over four years.

"Offering $40,000 scholarships to all accepted applicants who were members of the National Honor Society or Cum Laude Society at the time seemed risky, but it was a calculated risk," said John Buettner, a spokesman for Washington College.

"You need to spend money to become a more selective, more competitive college in the near-term," he said.

Guess what: It worked.

Average SAT scores rose to 1145 in 2004 from 1058 in 1995 and the number of students in the top fifth of their high school class rose to 66 percent from 54 percent. Also, the percentage of applicants admitted to Washington fell from 89 percent to 59 percent.

So-called value added incentives, such as free laptops and wireless connectivity, are also popular among incoming freshmen. Yet that is not all that schools are doing to lure the top talent.

"It doesn't stop at technology," Franek said. "Schools are launching capital campaigns to make sure they have the same, if not better facilities than the schools that they normally compete with."

Boston University is adding the finishing touches to its $225 million, 10-acre student village with the last component, a 280,000 square-foot fitness and recreation center, scheduled to open in March 2005. The development includes a 18-story dorm boasting four-star accommodations, a 83,000 square-foot air-conditioned track and field stadium, and a 290,000 square-foot entertainment and athletic arena set to open in January.

Schools jockeying with one another for the top talent should inherently make them more consumer-friendly, right? At least one educator argues otherwise.

"What [students] are getting for their dollars won't be the same if colleges were competing with each other based on price," said Robert Massa, vice president of enrollment and college relations at Dickinson College. "It cheapens the higher educational experience and reduces it to a commodity, which it is not."

Massa says he is sensitive to the rising price of a college tuition and that merit scholarships ultimately take money away from need-based grants which defray college costs for lower-income families.

The need to keep up with the Joneses -- or the Harvards and Princetons -- may drive some schools to funnel money to athletic facilities instead of academic programs to give them that extra edge.

Duke, Massa says, is in a strong position competitively with or without the iPod. But he wonders if the experiment will give way to similar incentives from other top-tier schools.

"Even at the top of the food chain, the competition among colleges and universities is intense," he said.

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Christoph Guttentag, director of Duke's office of admissions, argues that the decision over where to apply and where to enroll is never about one single thing.

"An iPod alone isn't going to convince a student who was otherwise not going to apply to apply," he said.

Well, maybe not. But the University of Pennsylvania just built a new gym a couple of years ago. So let's see if any other Ivies will flex their muscles in the coming years.