Getting In and Getting Aid: Why Having Money Can Be a Competitive Advantage
Many families worry about the negative impact that savings have on receiving financial aid. After all, both the federal government and individual institutions assess your and your child’s savings at high rates through their respective applications, the FAFSA and the C.S.S. Profile. As a result, many people deplete, or hide, their liquid cash holdings, so that they appear poorer with the intention of getting their children better deals when they apply to college. Yet, what many families don’t realize is, having some money may make your child a more appealing candidate both for admission and for merit-based scholarships.
Perhaps the fact that certain colleges use an applicant’s financial health to make admissions decisions doesn’t surprise you. So-called “Development Cases” are legendary at some of our nation’s schools. Who hasn’t heard stories of the wealthy alum’s academically mediocre child getting in, simply because his or her parent promised to buy the school a new gym? While such instances are actually quite rare, they do highlight the admissions advantage accorded to wealthier prospective students.
So what happens to families who fall somewhere within the spectrum of the middle class and the mega-rich? Although the majority of these high-income families do not fall into the “Development Case” category, most do have a leg up at tuition-driven schools, whether or not the parents are alumni. Not only do their tuition dollars help subsidize a college’s operations, they can also provide the money needed to offer less wealthy students need-based aid. In addition, the admissions of these students undoubtedly pleases the parents, who will in turn serve as great contacts for internship and job opportunities for the college’s other students. So in reality, offering admission to relatively wealthy applicants can turn out to be a win-win-win situation: for the alum’s child, the college, and the rest of the admit pool.
What may seem surprising, and even counter-intuitive, is that some colleges not only offer admissions preference to wealthier applicants, but also entice them to enroll with more money.
Using a method known as Strategic Enrollment Management (S.E.M.), schools that do not practice need-blind admissions recruit these prospective students, measure their interest in and fit at the institution, and subsequently award merit scholarships based on a student’s academic as well as financial profile. At its best, this admissions tactic improves a school’s academic profile, while it retention and graduate rates. At its worse, it places equally meritorious, but more financial needy students at a serious disadvantage.
After all, some colleges argue that it makes more economic sense to offer $5,000 merit scholarships to 6 wealthy students, whose parents can then afford to pay the difference in tuition, than it does to offer a $30,000 merit scholarship to 1 student, whose parents’ savings cannot support the college’s operations. Only in cases in which tuition-driven, non-need-blind schools really want a poorer student do they use S.E.M. to build financial aid packages heavy with grants or scholarships.
So what should you do if you fall into either category?
If you are an applicant whose family has a lot of money, you may not want to hide your savings from these tuition-driven schools. It may mean the difference between getting in and getting rejected.
If you are an applicant whose family does not have a lot of money, show as much interest in the school as possible, work hard, and let the school know how your will make unique contributions to their community. Admissions Offices track the number of times prospective students make contact with them, and use that number to gauge their genuine enthusiasm for the university. What you may lack in dollars, you can make up for with effort, and that’s not a bad skill to have in life.