Sunday, December 9, 2012

Need-Blind, Need-Aware and College Admissions

Does financial need factor into the college admission decision and if so, how does it affect applicants and to what extent?  Adding to the anxiety about college admissions is the question about how to handle and interpret application questions on financial aid.  Parents, especially those who are not sure whether they will qualify for assistance, often ask whether checking “yes” to the need-based aid question might negatively impact a student’s chance for acceptance. 

Like many questions related to college admission, the answer is rarely so straightforward. Students, of course, want to maximize the probability of admission without jeopardizing their opportunity to receive financial aid for college.  Some schools profess to be need-blind, meaning that they do not consider ability to pay in the admission decision.  That may sound like good news; however, it does not necessarily mean that the college will provide adequate financial aid to enable the student to attend once admitted.  New York University, a need-blind university, does not claim to meet demonstrated need and generally comes up short by more than 30% of the cost.  Admitted students are counseled by admissions, only after acceptance, that attending the university might not be a sound decision if it requires excessive borrowing.  

Certain need-sensitive colleges take a different approach to college admission, choosing to give more aid to fewer students rather than put affordability out of reach for many. Several of the more selective need-sensitive colleges, in fact, admit most though not all students without regard to their ability to pay.  When it comes down to the final 2-20% of the admission decisions (depending on the college), ability to pay becomes the deciding factor.   Is this more palatable than offering a spot in the class without providing the means to pay for it? Wesleyan University believes so, yet met with protests from students, parents and alumni when it switched from a need-blind to need-aware or need-sensitive policy this past May, stating that it would now consider ability to pay when filling the last 10% or so of the class.  The college chose to alter its admission approach so that it would still be able to meet the demonstrated need of every admitted student. A list of the small group of Colleges-that-claim-to-meet-full-financial-need was published by U.S. News & World Report earlier this year.

Whether a college is need-blind or need-aware, families should have an understanding about what they can afford to pay and what amount of borrowing is manageable, even before the applications are submitted. The unfortunate truth is that need is an unavoidable topic in most college admission offices. Colleges do not have unlimited financial aid budgets and most have to factor this into the equation. You can decide to try to game the system and avoid checking the will you apply for need-based financial aid? box, but if you honestly do not have the ability to pay, you are not doing yourself or your child a favor.  That being said, it is a good idea to understand the likelihood of your receiving aid as you work through the process.

Here are some guidelines on how to think about the application financial aid question to help you evaluate its potential impact on the admission decision for your child:

-          Is the school in question a reach, mid-range or likely for your child? If he or she is not at the high end or at least in the upper half of the admitted student range in terms of academic performance or some other compelling factor, having a financial need probably works against him/her in the admission process.  A student with money and the same academic qualifications has a better chance of being admitted. 
-          The most selective colleges reserve their financial aid for qualified students with demonstrated need rather than those with the best academic record.  At places where admission is less selective, merit tends to rule.  Many colleges use financial aid as the carrot to lure the most desirable students, whether they need financial assistance or not. In search of ever-improving rankings, colleges essentially pay to attract the high performers. 
-          More schools “gap” than do not; they expect that you will fill the balance of your need with student or parent loans.  So even if your Expected Family Contribution or EFC is less than the cost of attendance, don’t just assume that the college will make up the difference with a grant.  One major caveat: some colleges disingenuously qualify loans as financial aid; since loans must be paid back, be advised to distinguish them from grant money which is a gift.  If it is not clear whether a financial aid “award” includes borrowed money, ask.    

The best way to find out how need factors into the admission decision at a particular college, if in doubt, is to pick up the phone and call the school.  Keep in mind, however, that a need-blind policy will not necessarily work in your favor if tuition is high and the financial aid policy is to gap.  Net price calculators which can be found on every college’s website are another tool at your disposal to estimate your actual out-of-pocket cost per year.  You can also use College Navigator, a Department of Education site, to get a sense for what families in your income range typically pay at a given college.   With these tools, you will be better informed before checking the financial need box.