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 toget 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. This combination of admissions and financial aid policies drives low-income students away from the more selective colleges and the more advanced degree programs. As a result, wealthier students are overrepresented at these colleges. According to data from the National Postsecondary Student Aid Study (NPSAS), 34.9% of the students at very selective 4-year colleges have family adjusted gross income (AGI) under $50,000, compared with 45.8% of students at moderately selective 4-year colleges, 54.1% of students at minimally selective 4-year colleges and 63.8% of students at open admission 4-year colleges. In contrast, 34.5% of students at very selective 4-year colleges have family AGI of $100,000 or more, compared with 22.6% of students at moderately selective colleges, 16.0% of students at minimally selective colleges and 10.5% of students at open admission colleges. In effect greater selectivity is manifested as a preference for wealthier students. Similarly, data from the 2007-08 NPSAS demonstrates that 27.2% of students pursuing Bachelor's degrees had family adjusted gross income under $25,000 in 2007-08, compared with 40.6% of students pursuing Associate's degrees and 51.5% of students pursuing Certificates. A quarter (24.9%) of students at non-profit colleges had a family AGI under $25,000, compared with a third (33.4%) of students at public colleges and three-fifths (58.0%) of students at for-profit colleges. For-profit colleges tend to have open admissions policies. A fifth (19.7%) of students at very selective 4-year colleges received the Pell Grant in 2007-08, compared with 25.2% of students at moderately selective 4-year colleges, 30.2% of students at minimally selective 4-year colleges and 34.2% of students at open admission 4-year colleges. Some need-blind colleges use financial aid and other discounts to attract wealthier students. The 2008 NACAC study reported that 63% of private colleges and 15% of public colleges use preferential packaging, where more desirable applicants will get a more attractive mix of grants, work-study and loans. Preferential packaging is mostly based on academic merit or a particular talent or skill of interest to the college, but about two-fifths of it is based on income. This leveraging of the financial aid package helps the colleges financially because they get more net tuition revenue from a wealthier family than a low-income family even after accounting for the extra grant aid to the wealthier student. Institutional aid — money from the colleges own funds — 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. Moreover, while 85% of non-need or merit-based aid was awarded to low-income families earning less than $50,000 in 1993-94, this dropped to 32% in 2007-08. In 2007-08, need-based aid represents 55% of financial aid to low-income families, 44% of financial aid to middle-income families and 30% of financial aid to high-income families. Wealthy families still get some financial aid, but most of it is not based on financial need. The most selective colleges appear to be the only colleges opposing this shift away from need-based aid. According to data from the NPSAS, 56% of institutional financial aid dollars were need-based at very selective 4-year colleges in 2007-08, compared with 37% of institutional financial aid dollars at less-selective 4-year colleges. Even so, 44% of institutional financial aid dollars at very selective 4-year colleges were non-need or merit-based, and enrollment at these colleges is still tilted in favor of wealthier students. Colleges are increasingly under financial pressure, so need-blind admissions policies may change. For example, Tufts University suspended its need-blind admissions policy recently, and Williams College ended need-blind admissions for international students. On the other hand, Hamilton College just switched from need-sensitive to need-blind admissions. While some colleges have admissions preferences for wealthier students, few if any public and non-profit colleges have admissions preferences for low-income students. The selectivity of the more elite colleges puts talented but poor students at a disadvantage in the admissions process. Low-income students do not have the luxury of participating in extracurricular activities or athletics, nor can they afford SAT-prep classes, because they have to work at one or more part-time jobs to help their parents put food on the table. Frankly, a low-income student who succeeds academically despite adversity is much more impressive than a wealthier student who had every opportunity handed to him or her. It's a mystery why the most selective colleges don't do more to admit and enroll talented low-income students. The bottom line is that there might be a slight admissions advantage for wealthier students who do not have financial need, especially for wait-listed students. Ask the colleges you are considering whether they practice need-blind admissions, and whether that need-blind admissions policy or practice includes students who are wait-listed. Nevertheless, you should still apply for financial aid if you need it. It does a student no good to be admitted if he or she can't afford to enroll. Some families figure they'll dig deep to cover the costs the first year, hoping that the college will pick up the tab after that, but this may not be realistic. Some colleges front-load the grants, meaning that they award more grants during the first year and less grants in subsequent years. Other colleges restrict institutional grants to just students who applied for aid the first year, leaving you with mostly loans to cover your costs. Even if you don't apply for financial aid, the colleges can infer something about your family's finances by looking at your zip code or the parent's occupation.