College Planning Blog

The line on applications for admission that makes parents shudder most is the one that reads, “Do you plan to apply for financial aid—Yes or No?” As eager as one might be to check “yes” with the hope of receiving some type of assistance, there is a growing reluctance to do so for fear that checking “yes” might compromise the student’s chances of gaining admission.

This conundrum hits close to home in the current economy when even families who live in relative comfort are suddenly faced with uncertainty regarding cash for college. As the need for some type of assistance (merit scholarships, loans, campus work study) becomes more acute, so does the angst with regard to how that expression of need might be interpreted in the admission process.

As a result, the “Yes/No” question on the admission application becomes more relevant. At most institutions, the question is used to determine the likely demand for institutionally awarded aid—money allocated from the college or university’s budget for need-based aid. Frankly, the question holds little other value other than to help interested admission officers track the progress of financial aid applications.

Will institutions discriminate in the admission process with regard to a family’s ability to pay? Sure. However, they are not likely to do so based solely on the response to the “Yes/No” question. Rather, they will discriminate at the back end of the process when they have a full view of all the candidates they like as well as the respective financial needs for those candidates. It is at this point when they can see the big picture that they determine how to use available funds to leverage the enrollment of the students whom they value most.

Discriminating against students solely on the basis of who checks “Yes” to the financial aid question would be foolish. Roughly one-third of applicants for admission who check “Yes” indicating that they intend to apply for financial aid either never apply—because they realize they don’t need it—or they do apply and demonstrate that they don’t need it! Discriminating based on a “Yes” response means an admission committee will arbitrarily eliminate one-third of its applicants—many of whom would not have required institutional assistance.

If you respond “No” to the question—and there is good reason to believe you won’t need assistance, a “hurdle” to the success of your candidacy goes down. In the competition for admission at many colleges, your ability to be self-supporting financially is a competitive credential. Either consciously or subconsciously, when the folks reviewing your credentials see the “No” response they make the mental note that you are “free”—that you don’t require assistance.

So, what do you do? First, respond honestly. If you think you need assistance, say so. By acknowledging the possibility you enable an admission officer who is interested in your candidacy to track the progress of your financial aid application. If anything is missing, late, or incomplete, s/he can let you know in a timely fashion. And second, trust in the fact that colleges that value you for what you do well will admit you and give you what you need financially in order for you to enroll.

What you DON’T want to do is scheme the process. Don’t pretend to be “rich” by putting all of the money you have saved for college into your first year in order to improve your chances of getting in—and then expect to receive financial aid in subsequent years because you’ll be so darn poor you need it! Colleges budget financial aid for years two, three and four of your enrollment based on the expectations of year one. If you look “rich” when you apply, they expect you to be “rich” in the years that follow. If you plead poverty after your first year without evidence that something catastrophic (serious illness, injury, death, or loss of employment) has affected your family’s financial picture, don’t be surprised if the response of your financial aid officer is simply, “That’s your problem.” This is when families—and students in particular—start borrowing beyond their means to stay in school.

I would like to offer a couple of related thoughts. One, if you know you don’t require institutionally funded need-based assistance but anticipate applying for a Guaranteed Student Loan (Stafford) or you hope to secure a part-time job on campus, be prepared to complete the Free Application for Federal Student Aid (FAFSA) as institutions will use that to determine your eligibility for federally subsidized programs on their respective campuses.

Two, if you would like to be considered for any merit scholarships offered by a college or university, look for evidence that the place in question may actually offer such awards. If they do, find out about the eligibility criterion and protocols for placing yourself into consideration for an award. Most schools will have separate evaluation processes in place to determine merit scholarship recipients apart from the “Yes/No” question discussed previously.

Finally, when in doubt about what to do, check with the financial aid officers of the school(s) in question. It is better to move forward with good information than to discover too late that you have misinterpreted the process.

Special Note! The Best College Fit Membership program is about to launch! Watch for upcoming details to learn more about how you can go inside the college planning process with me to find and get into the schools that fit you best!

How is the downturn in the economy going to affect the college-going process? This seems to be the latest $64,000 question. The economy is in the “tank” and families everywhere are feeling the uncertainty as the financial markets struggle to right themselves. This is particularly true of families with young people making plans for college.

During my travels this fall, I hear more and more questions relating to educational access. “How will the economy affect our access to financial aid?” “Does this mean colleges will change the way they admit students?” “What will happen to our ability to get student loans?” I don’t presume to have all the answers but I can make the following observations.

• Many families are predictably shifting the focus of their college searches to less expensive state-supported institutions.
• State-supported institutions will be limited with regard to the number of students they can absorb. Some state universities/systems are already heavily stressed, especially those with entitlement scholarship programs, and may be forced to cap enrollments rather than accept all who qualify.
• Private colleges and universities are continuing to award financial aid, both need-based and merit-based, to the students whom they value most.
• The number of student loan providers is shrinking such that more families will need to rely on private lenders (banks, financial institutions) for unsubsidized student and parent (PLUS) loans.

The availability of cash for college is tied to liquidity at both the personal and institutional levels. Parents whose investment portfolios are devalued in the current market have less equity on hand for the purpose of securing loans. And institutions that rely on the interest from their endowments to subsidize their financial aid (discount) programs are finding that their capacity to “backfill” against their discount rates can be significantly compromised when that return is less than expected.

The latter is something to watch. If the recession is extended, devalued endowments will have serious implications for institutions (except for the very wealthy). With less cash coming in (lower interest payouts) from their endowments and the likelihood of reduced annual giving from alumni and friends, schools may find themselves in positions where funding their student enrollments takes precedence over other priorities. In order to fund their financial aid programs, private colleges and universities in particular will have to scale back other elements of their programs and facilities maintenance—a phenomenon that revealed itself during the recession of the late 1980’s. Let’s hope that doesn’t happen.

So, what does this mean for you—the consumer? In the short term, you might expect to see business as usual across the board in terms of how colleges recruit and enroll their classes. They will work hard to at least maintain the appearance of being unaffected by the current economic conditions. Some may decide to reduce (private) or cap (public) their enrollments in order to maximize create greater efficiencies within their operating budgets. But for the most part, they will continue to press for improved academic profiles, increased diversity, greater selectivity and higher yields. And they will continue to use their financial aid budgets to leverage the enrollments of the students they value most!

Therefore, it is imperative for students to focus on finding the best college fit. If affordability is a concern for you, places that value you for what you do well will admit you and give you what you need in order to find success. In a more robust economy you might be more comfortable taking chances—applying to and, perhaps, enrolling at schools that are “reaches” for you even though you might be expected to finance a greater portion of your education.

Now, however, it is more prudent to focus on places that will give you comparable educational values AND that will make it less painful for you to attend financially. Graduating with enormous debt (more than $30,000) after four years is a choice you make—it’s not something you need to do!

So, be student-centered. Focus on you—what is important to you? What do you want to get out of your college experience? Where can you get what you need—don’t assume that it’s an all or nothing proposition (Ivy or bust). The best school for you will provide an environment that embraces you because of the strength of your potential and is prepared to invest in your success?

To learn more about a student-centered approach to finding and getting into colleges that are good “fits” for you, you need to read Winning the College Admission Game; Strategies for Students and Parents. Autographed copies of the book are available at www.theadmissiongame.com. You can also find the book at Amazon.com and in bookstores around the country.