Liz Weston

LOS ANGELES (Reuters) – Filling out the federal financial aid form known as the FAFSA “is one of the first and most important steps” to getting a college education, First Lady Michelle Obama told a group of parents and students attending a FAFSA workshop at a Virginia high school on Wednesday.

What she didn’t mention is that applicants’ financial need can hurt their chances of being admitted at many schools.

Public colleges and universities typically make admissions decisions without regard to the applicants’ ability to pay. Only the nation’s richest private colleges, however, can afford to accept students based solely on their merit, and then meet 100 percent of any financial need those admitted students have.

The vast majority of private institutions practice some version of need-aware admissions policies to balance their mission to educate with their need for revenue to pay the bills, said Jim Jump, a former president of the National Association for College Admission Counseling.

“Most institutions are trying to do the right thing, but they are facing budgets that are getting squeezed,” said Jump, who is now academic dean and director of guidance at St. Christopher’s School in Richmond, Virginia, and a blogger (here).

“It’s only the old established institutions with great endowments, like the Ivies, that are able to be need blind with every student.”

The recession derailed many schools’ attempts to become need blind – or at least less need aware – as shrinking endowments collided with greater student need. Jump said he fears that going forward, colleges will have to become even more mindful of who can pay, and who can’t, as the pool of traditional-age students continues to shrink.

Even before the recession, college consultant Todd Weaver suspected that some schools touted themselves as need blind mostly as a marketing ploy.

“They wanted to increase their applications from every walk of life (so they could) reject more applications and make themselves look more selective,” said Weaver, of Strategies for College, a Hanover, New Hampshire-based consulting firm.

AID AND THE WAIT LIST

Many private schools are essentially need blind in their first round of admissions, Jump said. Top applicants are chosen solely on their merit. In subsequent rounds, more marginal students will be considered, but with an eye to whether they can pay their way or will need help. Students with high need may not get an offer of admission or may be wait-listed. Even if eventually admitted, these wait-listed students may get little or no financial aid, Jump said.

George Washington University had to admit late last year that its supposedly “need-blind” admissions policy actually wasn’t.

The university’s independent student newspaper, the Hatchet, broke the news that applicants who met the school’s admissions standards but who were not among its top applicants were moved from “admitted” status to “waitlisted” if they required financial aid.

Another approach public and private schools take is to accept students regardless of their financial status, but then fail to meet all or even most of their financial need in a process known as “gapping.”

Thanks to state funding cutbacks, public schools “rarely have enough money … to say they’ll be able to meet need,” Weaver said.

Meanwhile, many schools aggressively court foreign students and others who, based on ZIP code and other signifiers, such as private school attendance, they’re confident can pay full price.

That doesn’t mean poorer students should try to mask their true financial standing, college consultants stressed. They just need to be strategic about where they apply.

Focusing on public colleges and universities where the student has a reasonably good chance of admission is one such strategy. Most students attending four-year colleges, and the vast majority attending two-year schools, go to public institutions.

Families interested in private colleges would be smart to seek out schools where their students are likely to make the first cut in that initial round of admissions decisions, Jump said. Resources such as the College Board, CollegeData and the National Center for Education Statistics show the range of test scores, GPAs and class rankings for admitted students.

“You should apply to places where you are very much within the acceptable range,” Jump said, “as opposed to applying to nothing but ‘reaches.’”

(The author is a Reuters columnist. The opinions expressed are her own.)

(Editing by Beth Pinsker and Leslie Adler)