You are right. Turning an adjective into a noun tends to make it more degrading because you’ve focused on the characteristic rather than the person. That’s why referring to people as “blacks” or “females” feels icky. It’s why we saw “deaf people” and not “the deafs” or “old people” and not “the olds.”
I was so hoping you were going to say that they discouraged you from putting white so that it opened you up for diversity-based scholarships. I am so disappointed to hear that was not the case. What they did is really messed up.