Financial Aid (FA) can be daunting for individuals going through the college application process for the first time. FA is a crucial part of the college admissions process as a whole. Adequate early preparation is key. Parents and students need to be extremely wary of what colleges say regarding FA and college admissions and what is actually true.
We’re here to help you separate fact from fiction.
The amount of aid awarded has skyrocketed over the past fifteen years. In that time it has become very fashionable for top colleges to offer extremely generous aid. It also became extremely fashionable for colleges to tout “need-blind admissions” policies.
What “need blind” means, in theory, is that an ability to pay for college does not affect the chances for admission whatsoever. However, there are a few loopholes in the system. It’s important to note that even though colleges cannot see your financial specifics, they can and do take into account whether or not you are applying for aid. Therefore, they know that you have applied for aid, but they cannot see how much aid you would receive.
This creates a problem. Using basic risk theory, admissions panels have to assume the worst and hope for the best. What this means is that they have to assume that the student would qualify for full aid (the worst case scenario), while hoping the student qualifies for no aid (best case scenario).
The takeaway is that it is risky to ask for FA from most need blind colleges. To reiterate, the admissions panels have no choice but to assume their college would take the maximum monetary hit for each accepted student requesting an aid package. Thus families need to make a very simple decision: do they need aid so desperately that they would risk admission to get it? If the answer is no, then do not hesitate to write “no” on your application.
FA trends can also vary from college to college. For example, Harvard has so much money that they truly do not care about a students’ ability to pay. Thus they are truly “need blind”. Consider other prestigious colleges such as Dartmouth, Williams, Brown or Hopkins – they are “need blind” but do not have large enough endowments to support infinite FA spending. These admissions panels are more likely to admit someone who is not asking for aid. While schools such as Wake Forest, Lehigh and Georgetown are similar to the four aforementioned schools as they are expensive and private institutions, they have even less money in their endowments and are far more likely to consider FA in admissions.
You may ask, why lie? What does that accomplish for the college? Touting a “need blind” option actually serves multiple purposes. First, colleges inherently want to be like Ivy League heavy hitter Harvard, and Harvard has always been the pioneer for ‘need blind’ FA. Second, colleges can get more applicants if they make the school seem affordable.
This is our first post of a series about FA and college admissions. Next, we will discuss the FAFSA, and how it can be one of the greatest pitfalls of the entire process.