Need Aware vs. Need Blind Colleges

My last post focused on whether families should indicate on a college application whether they will seek financial aid.

Here’s my position: if you need financial aid to attend college, you should apply for aid. In case you missed it, here is the post:

Why Failing to Apply for Financial Aid Can Be a Mistake

My post prompted a mom to make this observation:

Good advice but the sad truth is that at some schools it CAN help you get it in.  Some schools are need blind, meaning they make their decisions based solely on the application, regardless of financial need.  Other schools, however, are not need blind and DO in fact accept a certain percent of “full pays.”  At those schools it *might* help you if you don’t need aid. You can ask each school about their admission policy.  Regardless, the advice here seems sound for the reasons listed.

The mom is right. Being rich can boost appplicants’ chances of getting into colleges because many institutions are need aware.  To understand how this happens, you need to know the definitions of these terms — need blind and need sensitive or need aware admission policies.

Need Blind Schools

When a college maintains a need blind admission policy, it accepts students without regard to the applicant’s financial need. That might sound great, but this approach can create heartache for plenty of students. Why? Because many schools that call themselves need blind will not provide sufficient money in their financial aid packages to allow students to attend their schools without committing financial suicide.

Let’s say a teenager, whose mom is a clerk at WalMart and whose dad is disabled, gets into a school that costs $50,000. The family celebrates until they realize that the financial aid package only includes a $20,000 grant. Where the heck is the family supposed to come up with the other $30,000 for the first year, much less the other three years?

The above hypothetical case illustrates the higher-ed phenomenon of gapping.   There’s a gap — sometimes quite huge — between what a student can afford and what the school is offering in its financial aid package. When the gap is large, I’d argue that it would have been better if the college had rejected the student outright instead of hiding behind their need-blind admission policy. Rather than outright rejecting some students, colleges will provide such a miserable financial aid package that they assume the teenager will attend a different school. Unfortunately, some families don’t take the hint.

While plenty of schools brag about their need-blind admission policy, the practice is meaningless unless they provide excellent financial aid to their students — those that need $50,000 in aid and those who might only need $5,000. Very few schools, by the way, are in that category.

Need Aware or Need Sensitive Colleges

At schools with need-aware policies, schools do examine the financial need of students. At many, perhaps most schools, the majority of students, however, are selected regardless of their financial neediness. Using this approach, a school will accept most of its freshmen class without any regard to its financial bottom line.  For the last say 10%, 20% or 30% of slots, however, a school may start looking at the financial ability of applicants, which will favor rich students. With this admission approach, the students who are marginal applicants AND financially needy can be rejected. Wealthy students who are marginal applicants can be accepted.

If you want to obtain a fascinating view of how a need-aware policy works, check out the following story about Reed College in The New York Times that illustrates how weaker, rich applicants can benefit from the practice:

College in Need Closes A Door to Needy Students

Who should be worried?

Under either financial-aid approach, a great candidate who requires a lot of financial aid will typically not have to worry about being rejected. It’s the students who require a lot of assistance and are in the bottom half of the applicant pile who could get short changed financially or simply turned away.