Will Applying for Financial Aid Hurt My College Admissions Chances?

Understanding “need-blind” policies in College Admissions

Most colleges operate within a ‘need-blind’ agenda which basically states that financial need will have no role in the admission decisions for low-income students. Further stating that financial need is not to be treated as a negative characteristic for those low-income students who desire college. On the flip side of this, colleges can however treat lack of financial need in high-income students as a positive attribute, and still consider them to be need-blind. The National Association for College Admission Counseling (NACAC) conducted a study which revealed that 81% of private colleges and 93% of public colleges practiced need-blind admission. It is important to remember that applying for admissions and applying for financial aid are two separate processes done by separate departments. A college which practices need-blind admissions does not consider an applicant’s financial need when they are considering or not to grant the applicant admission.

The Situations Where It May Hurt Your Chances for Acceptance

As with everything, there are exceptions to every rule. Between admission and financial aid policies it is silently easy to drive low-income students away from the more desired colleges, as well as the more advanced degree programs. Very few colleges are completely need-blind as seen in the waiting lists, the international students and transfer students. Naturally, full-pay qualified applicants are going most likely be admitted, this affects up to about 5 percent of the admitted students each semester. The actuality of this scenario is not about acceptance, moreover, what kind of aid will be provided, and if the financial aid department will provide enough aid to cover the students complete demonstrated financial need.

Financial Aid hurts your chances for admissions in colleges with the following criteria involved:

  • Need-Aware Institution: Excluded from this would be public institutions. This is more for students applying to popular schools which are out-of-state. These colleges expect out-of-state students to pay the full price of attending.
  • Reach School: This is a committee based decision to give incentives or opt for the full-pay for a student. This applicant is typically to be among the last admitted, maybe below average qualifications, and will require to petition-in based on financial need, and a college plan.
  • Low Information Admissions Process: Another committee based decision using the fact the applicant applied for financial aid than doing the actual EFC figure for determining need.
  • Institutional aid: This is money from the colleges own funds dispersal. It has increasingly been shifting away from need-based aid because of preferential packaging. For example, data from the National Postsecondary Student Aid Study (NPSAS) demonstrates that 45% of institutional aid dollars were need-based and 55% were non-need or merit-based in 2007-08, compared with 65% need-based and 35% non-need or merit-based in 1993-94 with 30% of this financial aid being given to high-income families. Wealthy families still get some financial aid, but most of it is not based on financial need.

Another key point to understand about today’s college admissions and financial aid is a current practice used by colleges called ‘gapping’. The need-blind admission offers absolutely no guarantee to the prospective student that the college will provide enough financial aid to fully meet the student’s demonstrated financial need. This is why it is called gapping because they will often offer bites of grants, work study, scholarships and loans; but only in small little packages. The student is still faced with the stress of unmet need. What the colleges will do however is offer the student the unsubsidized Stafford and Parent PLUS loans to fill the gap. This is a frustrating situation for the applicant known as the “admit-deny”, meaning a student is admitted but still cannot afford to attend.

For prospective students who worry about the financial aid conundrum, there is an alternative strategy. If you believe that needing financial aid will hurt your chance for admission at your choice college; then apply for financial aid after you have received the admissions decision. It may keep you from being able to qualify for school aid funds the first year, but it will open up the federal loan programs and possibly the ability to apply for work-study jobs. This strategy typically works well if you can cover the initial costs in the beginning of the first year. There are financial aid officers who can help you through the financial aid petition process for the following year. It is best to apply as early as possible for the most attractive financial aid packages.

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