Parents, understandably, were not thrilled, pointing out that while benefits may exist in the abstract, in practice it meant that their kids were being separated from friends they'd known since kindergarten. The resulting "brouhaha" was deemed likely to hurt the institution's admissions, and was also found to be, like, just a pretty s**tty thing to do without even mentioning it until students and parents began to notice.
In the school's defense, an education expert pointed out that the school had a valid point about how awkward it often is to be the only black kid in a history class where half the white students still think that getting free room and board made the whole slavery thing a wash. But they also pointed out that segregation is a Band-Aid solution, and that if the school really wanted the problem solved, they'd need to advocate for better financial aid and support for minority students, given that hoity-toity private schools aren't the most welcoming environments. We're sure the school will get right on that more costly and difficult solution.