Tuesday, April 21, 2009

How Badly Do They Want Me?

For those of you who may have missed the Education Life section in last Sunday’s New York Times, an article written by Laura Pappano titled The Office: Behind closed doors as aid officers decide just how much they want you to say yes, describes Boston University’s approach to awarding money. This is one of the more transparent articles I have seen in terms of shedding light on how aid dollars play into the enrollment management process. The executive director of BU’s aid office makes no apologies for the underlying messages that these award packages send: If you don’t get the financial aid you need, especially if you have been “gapped,” the school is telling you that it likes you enough to admit you, but you are not its top choice. If you read my prior post, you know that colleges use financial aid to entice students whom they want to attend; that is the unspoken truth.

So what is the best strategy for students? Devote the time when developing the college list in the spring of junior year to explore schools that will view you as a highly desirable candidate and colleges at which your special talents will be valued. There is no problem going for the reach school, but just be aware that if financial aid is an issue, being an “on-the-bubble” candidate may not only affect your award package, but might also impact your chance of admission.

While several colleges still claim to be need-blind, some are publicly moving away from that policy. Earlier this month, Tufts University announced that it had abandoned its need-blind policy for the last 850 applicants, or roughly 5% of the applications yet to be read. Their explanation was that the money just ran out. Message here: students requiring financial aid need to submit their applications early and not wait for the December 31 deadline, or whatever date it might be, in order to receive priority consideration for money!

Will we see more colleges follow the lead of Tufts over the next few years? Let’s not forget that colleges are businesses too. They have budgets to balance, which means that maximizing revenues and controlling expenses, especially in economically lean years, need to be a primary objective. Absent a quick rebound in the economy, which is not looking likely, do not be surprised to see other schools abandon the need-blind policy in the coming years. Some will continue to practice “need-aware,” which gets back to the point that money and candidate desirability are, in practice, not treated separately in the college admission process. Many people are skeptical that there are any schools today that can honestly state that they still maintain a Chinese Wall between admission and the financial aid office, regardless of the stated policy.

Friday, April 10, 2009

The Economics of a College's Admission Process

If your child is a senior in high school and is evaluating college options, he or she is most likely consumed with the decision about where to spend the next four years. No doubt, how to pay for college is more of a factor in the decision this year than it might have been in years past. Whether or not you qualify for need-based financial aid, your child may still have been fortunate enough to receive a merit-aid scholarship from some of the colleges offering admission. Why do schools do this for students who do not demonstrate need? You may be surprised to learn that colleges which rely on tuition to cover most of their expenses are more likely to offer merit aid, even during these turbulent economic times. Unless they fill every seat in the class, colleges may find themselves short of precious tuition dollars needed to operate. These are the funds necessary to pay everything from faculty salaries to the utility bills. Better to entice a student to attend by offering a nice discount to tuition than to fall short in filling the available spots, which may in fact mean resorting to faculty layoffs and other cost reduction measures.

The April 6 issue of Time Magazine had an interesting article: Sticker Shock: Inside the College Financial Aid Game by Laura Fitzpatrick, a look at the financial aid and admission process at Skidmore College this year. This article provides some interesting insights into the workings of a financial aid office at a college that relies 80% on tuition for its funding. According to one school official, not meeting their enrollment numbers by just a single student can mean a $25,000 to $30,000 gap in the operating budget. Skidmore, like many other colleges, actually increased its financial-aid budget 8% this year (primarily need-based) by reducing costs elsewhere including travel, faculty raises, and by placing renovation plans on hold.

So how does all of this affect a college’s admission practices and is it true that no colleges are truly need-blind (meaning that financial need does not factor into the admission decision)? There is no doubt that college admission in this economy definitely favors the student who can pay the full fare. While some schools still profess to be need-blind, others admit publicly that they are “need-aware” or “need-sensitive.” The most desirable students will make the cut, regardless of their financial situation. However, on the margin, the students who can pay will edge out those who can’t. By the way, one should not assume that a college which professes to be need-blind or need-aware will fully meet a student's demonstrated financial need. More and more colleges are following a practice known as "gapping," meaning that they accept a student, offer an aid package, but one that falls short of paying the full cost of attendance (a subject for another posting).

Even for families that don't qualify for aid, many are finding it very difficult to justify the private school sticker price these days. A recent U.S. News & World Report survey (published April 8, 2009) found that 70% of prospective college students will alter their college plans, seeking less costly options than they might have considered in prior years. Though college costs have been rising faster than the rate of inflation for many years, the time has come when families are recognizing the need to think more strategically about college and cost.

Thursday, April 9, 2009

The Decisions are In!

Now that April 1st has passed, most colleges have notified their applicants of admission decisions, ending an unusually anxious period of speculation about how the economy, juxtaposed against the largest class of graduating seniors, would impact the admission decision process. Though many colleges did have record applications this year, some have actually hedged their bets, admitting more students and maintaining larger waitlists, in anticipation of student fallout due to the recession. This year no one on the admission side is confident that they will know what their freshman class will look like by the May 1 deposit date. Will families ultimately choose state school options, feeling they can’t justify the cost of private school tuition in today’s economy (for more on Paying for College – Tacking the Tough Questions, see my article under Helpful Resources – Recommended Reading on my website)? The likely result: colleges will go to their waitlists this year, perhaps to an extent not seen in prior years. Schools probably won’t know until August what their ultimate freshman class will look like, as students get off waitlists at their first choice colleges and walk away from deposits at other schools.

So what does this mean for students who have been waitlisted at their number one choice? No one can predict how deep into waitlists college will go this year. In prior years, 14% of waitlisted students, on average, were ultimately admitted, though Harvard took a whopping 200 off the waitlist last year! While I honestly believe that colleges will heavily rely on waitlists to fill their freshman class this year, I would not advise a strategy of holding out for a school. It’s still a big unknown so students should focus on the options that they have and commit to a college that has already accepted them. That doesn’t mean you should give up on your hopes of getting off the waitlist. Get in touch with the school and let them know of your continued interest and why you think you are a good fit. Be specific on what appeals to you about the college and what you have to offer the school. Update the admissions committee on any positive changes in your profile, whether it is grades, awards, or some other honor or achievement. Then, don’t stalk. You have demonstrated your interest. Now commit in your mind and heart to one of your accepted school options. Remember, all your choices are good ones!