Posted on Wednesday, March 16, 2011
Forget the standard advice that everyone should apply for financial aid. This year, forgoing aid applications may actually boost the chances of getting accepted.
Thanks to the recent recession, more colleges are giving seats to wealthier students—especially international or wait-listed applicants—who are willing to pay full freight. Last fall, Williams College began admitting more international students who could pay full tuition, and will reintroduce loans into its financial-aid packages this year. Middlebury College and Wake Forest University began looking at wait-listed students' financial status as a factor in admissions last year. And Tufts University, which was able to admit all students on a "need-blind" basis—where they pledge to admit students regardless of their ability to pay—in 2007 and 2008, has reverted to being "need-aware" for some applicants—meaning that it takes an applicant's financial status into account.
At the same time, some elite schools, including Stanford University, Yale University and Dartmouth College, that still have need-blind admissions policies in place for all U.S. students are adjusting their aid formulas in ways that are raising costs for families with higher incomes.
In the years leading up to the financial crisis, private colleges—many of which hold need-blind policies—expanded their aid budgets to attract a more-diverse student body. Some schools dropped loans from aid packages in favor of grants and work-study programs, while others expanded their need-blind policies to more students, such as foreign applicants.
I. Battered Endowments
But with college endowments not yet fully recovered from the recession and a greater number of needier students, many schools are starting to rein in their generosity. The top students still will be heavily recruited, experts say, but as schools face greater financial strains, borderline applicants with fatter wallets stand a better chance of getting in.
Mark Kantrowitz, founder of FinAid.org, a financial-aid Web site, estimates that about 5% of the application pool may increase their chances of being admitted by not applying for aid—with international and wait-listed students seeing the greatest benefit. If the school does practice need-blind admissions, he says, ask if that policy also applies to international or wait-listed students.
The schools, for their part, say they aren't lowering admissions standards. Middlebury, which is need-blind for U.S. students, says it will make its first-round decisions for all applicants based on merit alone. If the school is within budget, then it will leave those decisions alone. If not, then it may consider the financial status of wait-list, transfer and international applications, says Robert Clagett, dean of admissions at Middlebury. "Being need-aware usually only influences those decisions at the margins," he says. "It depends on what resources are left."
Many schools begin by admitting part of the class without regard to the ability to pay, but start to consider it when the financial-aid budget runs thin. For the first time since 2005, the University of Rochester doesn't expect it will be completely need-blind when it comes time to admitting students off the wait list this year. "This year, we had a bigger early decision group and a slightly needier one," says Jonathan Burdick, dean of admissions and financial aid. "I'm certain we will be 95% need-blind. That last 5% is in jeopardy."
Schools also are tinkering with their aid formulas in ways that would require affluent families to pay more. At Stanford, students are being asked to contribute an additional $250 toward their education expenses for the current academic year and another $250 next year, bringing their total responsibility to $5,000. Meanwhile, families making more than $120,000 with more than one family member in college also may pay more under the school's new calculations.
"Our endowment was impacted by the downturn, so we're still struggling with the results of that," says Karen Cooper, Stanford's financial-aid director.
II. Paring Back Aid
Yale said in December that it will pare back the aid given to families who make more than $130,000 starting this fall. Dartmouth will replace some grants with loans ranging from $2,500 to $5,500 annually for financial-aid recipients with families who make over $75,000 beginning this fall. Grinnell College, meanwhile, raised the maximum annual loan limits in aid packages by $250 to $2,250 last year.
Schools, for their part, say they have made every effort to boost aid through fund-raising efforts, salary freezes and postponing capital-improvement projects. In the past five years, inflation-adjusted net tuition—what families pay out of pocket after receiving aid that doesn't need to be repaid—actually dropped 11.2% at private, nonprofit colleges, according to the National Association of Independent Colleges and Universities.
International applicants may have an edge over U.S. residents since many schools typically drop their need-blind pledges for foreign students. Williams, which is need-blind for U.S. students, had expanded that policy to foreign students before the financial crisis, but recently reversed it. International students cost the school about $10,000 more on average than U.S. students, says Paul Boyer, director of financial aid at Williams, who says the school is "absolutely not" lowering its admissions standards. Rather, he says, the school assumes those students have the ability to pay the full cost of attendance.
III. Going Out of State
As states cut back funds that would go toward educating in-state residents, public universities may increasingly turn to out-of-state residents to raise cash, experts say. State cutbacks have constrained the number of in-state students campuses enroll, leading some to admit more students who pay higher out-of-state tuition, says David Alcocer, associate director of student financial support for the University of California. The percentage of out-of-state residents is just under 7% across the U.C. system, up slightly from prior years.
At the University of Michigan, the percentage of out-of-state students was 40.1% for the class entering last fall, up from 34% in 2008. Those percentages fluctuate based on a variety of factors, says Martha Pollack, Michigan's vice provost for academic and budgetary affairs, who adds that in-state students remain the school's priority.
By JANE J. KIM, THE WALL STREET JOURNAL