Question: Can Division 3 colleges give out athletic scholarships?
No, Division 3 colleges cannot give out athletic scholarships. However, Division 3 schools CAN give out scholarships that are based on financial need or on other types of "merit." Usually this means academic merit but it could also be for arts, community service, etc.
Sometimes it seems to me that promising Div. 3 athletes get special consideration for merit grants (if they're at all qualified). And even though need-based aid is determined according to a formula that considers family income and assets, I've seen athletes given more grant (the good stuff that doesn't have to be repaid) and thus fewer loans than non-athletes might be offered. Since the amount of the entire aid "package" doesn't exceed what the student is entitled to receive as "need-based" aid, this doesn't count as an athletic scholarship, but it might help an athlete to enroll.