Does Applying for Financial Aid Affect Your Chances of Admission? - Fastweb

Does Applying for Financial Aid Affect Your Chances of Admission?

Mark Kantrowitz

January 31, 2011

Does applying for financial aid ever limit one’s chances of acceptance to a college? Do colleges give any subtle preference to students who state on their application that they do not need financial aid? For example, would it be advantageous for a student whose parents earn $150,000 and have adequate savings to tell a college costing $30,000 that they do not intend to seek financial aid? — Mary M.

Most colleges practice need-blind admissions, where they do not consider a student’s financial need when deciding whether to grant admission. But very few colleges are completely need-blind, as financial need often affects the admission of wait-listed, international and transfer students. Accordingly, full-pay qualified applicants are somewhat more likely to be admitted at some colleges, affecting up to 5% of the admitted students. Note that even if a college practices need-blind admissions, that doesn’t mean that they’ll provide enough aid to cover the student’s full demonstrated financial need. Students should never forgo applying for aid just to get in, if they need financial aid to help pay for college.

A 2008 study by the National Association for College Admission Counseling (NACAC) reported that 81% of private colleges and 93% of public colleges practiced need-blind admissions. An additional 6% of private colleges practiced need-blind admissions for the regular admissions pool, but then became need-sensitive when admitting students from the waiting list. The NACAC study reported that only 10% of private colleges and 2% of public colleges were need-aware throughout the entire admissions cycle. (Some colleges refer to need-sensitive admissions policies as “need-aware”. The two terms are synonymous.)

Other studies have reported lower percentages of need-blind colleges. For example, one study reported that half of the nation’s top colleges have need-blind admissions policies. The difference is due to the distinction between a need-blind admissions policy and a need-blind admissions practice. Many colleges practice need-blind admissions even if they do not have a formal need-blind admissions policy.

But just because a college practices need-blind admissions doesn’t mean that all students are admitted without regard to financial need. Even need-blind colleges have a tendency to switch to need-sensitive admissions when admitting international students, transfer students and students on the waiting list. This typically affects up to about 5% of admitted students. (Section 568 of the Improving America’s Schools Act of 1994 provides a temporary antitrust exemption to colleges that coordinate their institutional need-based aid policies provided that all students at the colleges are admitted on a need-blind basis. The exemption has been extended three times and currently runs through September 30, 2015. The requirement that colleges must be completely need-blind is one of the reasons why only two dozen colleges participate in the 568 Group. Most of the 568 Group colleges have adopted more generous no loans financial aid policies.)

Need-blind admissions doesn’t guarantee that the college will provide enough financial aid to meet full demonstrated financial need. The 2008 NACAC study, for example, reported that only 18% of private colleges and 32% of public colleges meet the full demonstrated financial need of all students. Many colleges practice gapping, where they leave students with unmet need. (Often the colleges will use the unsubsidized Stafford and Parent PLUS loans to fill the gap.) This can lead to an admit-deny situation, where a student is admitted but can’t afford to attend the college.

Need-blind admissions also doesn’t mean that the admissions is wealth-blind. A college might ignore financial need for low-income students, but then grant an admissions preference for high-income students. Most colleges define need-blind as meaning that financial need has no role in the decision to deny admission to low-income students. As such, financial need is not treated as a negative characteristic for low-income students. But colleges can treat a lack of financial need as a positive characteristic for high-income students and still consider themselves to be need-blind. For example, some need-blind colleges will admit full-pay but borderline candidates or grant wealthier students more attactive financial aid packages.

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