What they don't want you to know about admissions and financial aid.
#1 Just because a school encourages you to apply doesn’t mean they actually want you.
High school students who are inundated with personalized letters and emails (and even partially filled-out applications) from colleges urging them to apply may mistakenly think that the institutions contacting them are intending to admit them. In reality, schools often encourage students to apply so that they can reject them.
The aim of the game for colleges is to boost the number of students who apply and can be rejected. By doing this, the schools see their acceptance rates fall, making them appear to be more selective—which helps them rise up the U.S. News & World Report rankings.
Take Northeastern University in Boston. According to a report in the Wall Street Journal, the university sends nearly 200,000 personalized letters to high school students each year. The institution then follows up these letters with emails, making it seem that the school is wooing these individuals.
These tactics appear to be paying off. Nearly 50,000 students applied to Northeastern this year for 2,800 spots in the fall 2014 class—“more than in any previous year and a ratio of 18 applicants per seat,” the university boasted in a news release.
Lowering its acceptance rates is at least one factor in why Northeastern has catapulted up the U.S. News rankings, rising more than 100 spots since 2002.
#2 A college may not be as selective as it seems.
Another way that colleges attempt to appear more selective than they really are is through use of the Common Application, a standard form that students can use to easily apply to multiple colleges. Colleges have found that they can use the Common App to inflate their applications in order to lower their acceptance rate—one of the measures used to determine an institution’s ranking in U.S. News. As it turns out, the proliferation of the Common App has enabled students to easily apply to more than one school even if they are underqualified. Indeed, students are applying to more schools than ever before. In 2000, just a couple of years after the online Common App was introduced, only 12 percent of students applied to seven or more schools; in 2011, 29 percent did.
The University of Chicago provides an example of the factors behind this trend. For years, the university publicly rejected the use of the Common App. In fact, it marketed its own application as the “Uncommon Application.” But by 2007, Chicago officials caved to the demands of looking as competitive as the other schools using the Common App. As the vice president and dean of college enrollment told the Brown Daily at the time, “We took note of the fact that two of our major competitors, Northwestern and [the University of Pennsylvania], had decided to accept the Common Application.”
What was the result of the University of Chicago allowing the Common App? By 2013, the school increased the number of applications it received by more than 20,000 and reduced its acceptance rate by over 24 percentage points. This helped move Chicago from being ranked number nine nationally by U.S. News in 2007 to number five by 2014—ahead of its competitors Northwestern and the University of Pennsylvania.
#3 You may be rejected or wait-listed at a college simply because you are not wealthy.
Every year, a substantial number of private colleges reject or wait-list a certain proportion of applicants not because of grades or test scores or because they would not be a “good fit,” but, rather, simply because their families aren’t rich enough to pay full freight. These schools, in other words, are “need aware” when admitting a share of their students.
This may seem unjust. But colleges say they have no other choice because they have only a limited amount of money to spend on financial aid. “While financial aid is one of the top three expenditures at Oberlin, the amount of funds available is still finite, and we do have to take that into account in the admissions process,” says Elizabeth Houston, who works in the admissions office at Oberlin College.
“If, for instance, we admitted a class comprised entirely of students who could make no financial contribution to their education, we simply couldn’t afford it,” explains Houston in a blog post on the college’s website. “That’s an extreme case, but even taking into account the natural mix of income levels a college might see in their applicant pool, there are still very few institutions that are wealthy enough to afford to be completely need-blind and still meet 100 percent of demonstrated need.”
According to colleges, this typically doesn’t affect low-income students who are at the top of their class. Finances are only taken into account with more marginal students, they say.
Still, in a survey conducted by Inside Higher Ed in 2011, 19 percent of admissions directors at private liberal arts colleges reported that they admit full-pay students with lower grades and test scores than other applicants. These colleges are, in other words, providing affirmative action for the wealthy, despite all of the extraordinary advantages that these students have over their less-fortunate peers.
#4 Low-income students are not always better off at need-blind colleges.
It’s true that the most elite and wealthiest private colleges, like Harvard University and Amherst College, meet the full demonstrated financial need of their low- and moderate-income students. But many other colleges that boast about being need-blind don’t come close. Instead, they leave students with a hefty gap between what the government says they should be expected to pay and what they are being charged.
New York University, for example, admits students regardless of their financial need. However, NYU students from families making $30,000 or less face a daunting average net price—the amount students and their parents must pay after all grant aid has been exhausted—of $24,265 per year. (See “America’s Affordable Elite Colleges” page and our full rankings at washingtonmonthly.com, which calculate net price of attendance based on three-year averages.) That means that the lowest-income families are on the hook for an amount that is nearly equal to or even more than their yearly earnings.
Financially needy students who qualify for admission at NYU may actually be better off at “need-aware” schools that meet the full demonstrated need of the low-income students they do enroll.
#5 Need-blind schools are not really blind about their applicants’ need.
Administrators at purportedly need-blind colleges don’t necessarily need to know an applicant’s family income to know if he or she is poor, because they have plenty of other clues.
For example, admissions officers know where applicants live and what high school they attended, and whether or not they worked after school or participated in a plethora of extracurricular activities. Admissions staff members also know the occupations of the applicants’ parents and whether they attended college, and, more importantly, whether the student is a legacy. And these administrators can learn a lot about students’ backgrounds from their college application essays.
So if a need-blind school is looking to admit a much larger share of affluent students for budgetary reasons, it could easily do so without knowing exactly how much an applicant’s family earned last year.
#6 It isn’t always free to apply for financial aid.
Come financial aid season, many students and families realize that they must fill out the Free Application for Federal Student Aid (FAFSA) in order to get a financial aid package from their school. What many families may not realize is that very selective, elite institutions often require a student to fill out another, more extensive form for financial aid. And unlike the FAFSA, this secondary financial aid application—the College Board’s CSS/Financial Aid PROFILE—isn’t free. The PROFILE is expensive, costing a student $25 just to register and send it to one college, and then $16 for each additional college.
Over the past few years, the U.S. Department of Education has been simplifying the FAFSA in an effort to reduce the barriers that low- and middle-income families face when filling out an unduly complex form. As a result, the number of questions asked on the FAFSA has been reduced, and parents can now use a data-retrieval tool through the IRS to pre-fill answers to many of the questions. These changes have significantly reduced the average time students and families take to complete the application.
But the simplification of the FAFSA has been cause for concern among selective colleges who are hesitant to part with any institutional aid dollars. This has pushed many institutions to require the PROFILE in order to determine institutional aid eligibility. Since FAFSA simplification has removed some questions regarding a family’s assets and savings, institutions have adopted the PROFILE to understand exactly how many assets a family owns—including in many instances their house and the make and model of their car—before giving them any aid.
#7 The order that you list colleges on the FAFSA may come back to haunt you.
Even if a student is lucky and only has to fill out the FAFSA to get financial aid, he should be wary about the order in which he lists the colleges where he’d like to send the application. According to a recent article in Inside Higher Ed, “Some colleges are denying admissions and perhaps reducing financial aid to students based on a single, non-financial, non-academic question that students submit to the federal government on their [FAFSA].” It turns out that colleges see exactly the order the student listed the schools on the FAFSA and have become savvy at admitting, wait-listing, and packaging aid depending on the student’s ordering.
Enrollment managers and management firms—the people charged with figuring out just how many students to admit to “yield” a class—have discovered that students often choose colleges on the FAFSA in preferential order. Inside Higher Ed reported that Augustana College, for example, found that 60 percent of the students who list the school first on the FAFSA end up enrolling, compared with 30 percent of those who list it second, and just 10 percent of those who list it third. Like Augustana, some schools look at a student’s “FAFSA position” to determine admissions decisions—completely unbeknownst to the student. A school does this to improve its yield rate, to ensure that it is able to enroll exactly the class it wants.
Some schools may also be taking the “FAFSA position” into account when awarding their own financial aid dollars to students—providing less generous aid packages to students who list the college first on the FAFSA. These colleges don’t want to waste precious institutional aid dollars on students who are already likely to attend without the help.
The problem is that not all students necessarily list schools in preferential order, or there may be very little difference among a student’s number one, number two, and number three option. Worse yet, the whole process is completely opaque to students. They have no idea that their chances of being admitted and receiving a generous financial aid package may ride largely on the order in which they list schools on the FAFSA.
#8 Financial aid award letters may make options seem more affordable than they really are.
Colleges don’t always come clean about how much students and families are going to have to pay to attend an institution. The “financial aid award letters” that colleges send aid applicants they’ve accepted often make their schools look more affordable than they really are.
One problem is that many colleges and universities package both grants and scholarships with loans and work-study allowances. This blurs how much students and parents are going to owe, often leading them to believe they are getting a great deal when in reality they are taking on a large amount of debt. Some colleges and universities include Parent PLUS loans in the “aid” packages they offer students, in order to bring their purported price down to zero. The Parent PLUS loan, which parents borrow on behalf of their children, come with a higher interest rate and less repayment flexibility than other federal student loans. Additionally, parents have to undergo a credit check to get a Parent PLUS loan. This means that a student and his or her parents may accept the financial aid package, put down a nonrefundable deposit to the institution, and then suddenly find themselves facing steep gaps in financial aid if the parent gets rejected for the loan.
Adding to the confusion over financial aid packages is that each institution has developed its own award letter, making it difficult for students to make an apples-to-apples price comparison among the institutions to which they’ve been accepted. This could lead them to make a suboptimal choice in terms of which school will provide the best aid package while also still being a good fit academically and socially.
#9 Some aid packages are designed to dissuade you from enrolling.
Many colleges offer extremely generous aid packages to the students they most desire, and leave large funding “gaps” for others in whom they are less interested. In the parlance of enrollment management, this is called “admit-deny,” in which schools provide students with aid packages that don’t come close to meeting their financial need in order to discourage them from enrolling.
“Admit-deny is when you give someone a financial-aid package that is so rotten that you hope they get the message, ‘Don’t come,’” Mark Heffron, a senior vice president at the enrollment management firm Noel-Levitz, told the Atlantic Monthly back in 2005. “They don’t always get the message.”
Under this model, top students receive substantial amounts of grants and either need-based or merit-based scholarships. Those who are less desired have to take on a substantial amount of debt if they want to attend—either through private loans or federal PLUS loans for their parents.
Schools that engage in these practices don’t tend to advertise them. An exception is Muhlenberg College, a small private college in Pennsylvania, which includes a page on its website entitled “The Real Deal on Financial Aid.”
“It used to be that you could try for that reach school and if you got in, you didn’t have to worry because everybody who got in, who needed money, got money,” the college’s financial aid office states. “Today, however, as colleges are asked to fund more and more of their own operation with less and less assistance from government, foundations, and families, they are increasingly reluctant to part with their money to enroll students who don’t raise their academic profile.”
#10 Often the financial aid you receive your first year will be less generous the following year.
Students and families beware: the plum financial aid package you receive your freshman year may not be quite as impressive your sophomore year. The bait and switch of financial aid packages from year to year is known as “front-loading financial aid.” According to Mark Kantrowitz, a financial aid expert, about half of all colleges front-load grants and scholarships so that students receive a bigger discount their first couple of years but then face a financial aid package filled with loans in subsequent years.
Part of the problem is that many parents and students are unaware that they must apply for financial aid every year they are in school and that the price they pay can vary dramatically from year to year. A scholarship may come with a GPA requirement, for example, but it could also just be a one-time award given to incoming freshmen to attract them to the school. Think of it as a signing bonus—or tuition discount—that disappears by year two.
According to a study done by Kantrowitz, enough colleges front-load aid that the average net price for returning students—the price students pay after grants and scholarships are accounted for—is about $1,400 more. He also found that the more selective a college is, the less likely it is that it will front-load grants. What’s the best way to figure out if you’ll be the victim of a financial aid package bait and switch? Ask the college. Only problem is that some colleges will be less honest than others.
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