Colleges should rebalance finances rather than adopt need-aware policies: Financially biased admissions hurt students from low-income backgrounds

By Amal Cheema ’17

 Staff Writer 

When it comes to money and prestige, not all schools act with integrity. Some schools  falsify or provide misleading information about financial aid. Last month, George Washington University (GW) confessed that, rather than following the need-blind policy it advertised, the school actually takes into account a student’s ability to pay tuition when determining admissions, specifically in the second round of admissions. GW uses a need-aware approach to admissions, not the need-blind policy it publicized.

For many private schools in a recovering economy, the absence of financial resources leaves the institution little choice but to adopt need-aware policies. However, these need-aware policies preferentially accept wealthier students, undermining the role of higher education in equalizing the economically stratified American population.

GW is not the only need-aware university. In the past five years, Colby College, Reed College, Tufts University and Wesleyan University have all gravitated toward varying degrees of need-aware or need-sensitive policies—although unlike GW, they did not misrepresent their financial aid policies. Smith College has applied a need-aware policy to its waitlist and international students since 1992.

These universities’ choices are entirely motivated by finances. GW administrators argued that by rejecting students the school cannot afford to support, GW can more fully meet the financial needs of the students it can support. In GW’s defense, the university offers more financial aid than most of its peer schools, meeting, on average, 88 percent of a student’s demonstrated need. In comparison, NYU is need-blind but only meets 55 percent of the average student’s need.

But a need-blind policy does not necessarily guarantee financially unbiased admissions. College applications provide enough details. Zip codes, parents’ level of education, and personal essays give admission officers an understanding of the applicant’s financial situation. When interviewed for the GW Hatchet, the school newspaper, a former admissions counselor who spent multiple years at GW stated, “You absolutely know if you’re admitting an inner-city kid from the Bronx with a parent who drives a taxi and didn’t go to college versus a kid whose parent works on Wall Street.” The collection of facts about financial circumstances places doubt on the unbiased nature of need- blind admissions, qualifying that even need-blind institutions have the ability to make admission decisions based on finances if financial resources are ever a concern for the universities.

Because of the economy, low endowment returns and  growing financial needs, many schools face must choose between a need-blind and need-aware policy. The business models of colleges allow for three solutions.

Firstly, universities like GW can choose to admit wealthier students over low-income students, deliberately rejecting students based on socioeconomic status. Secondly, they can “admit-deny” or, through a process called gapping, admit a student and intentionally offer an inadequate financial aid package, thus indirectly rejecting the low-income student. In either case, the school can continue to assert that it will actively enroll more low-income students, but in practice, adopt contradictory policies. The third option, also explored by GW, is to ask rich alumni for donations to endowment in order to meet a student’s financial aid.

Wellesley College can afford its need-blind policy. Sixty percent of the class of 2017 receives need-based financial aid, drawing nearly $13.5 million in grant aid from Wellesley. As of 2013, Wellesley has an endowment of over $1.5 billion and a student population of about 2,300 students. In comparison, GW’s endowment is $1.3 billion, and its student population is 25,000.

Our perception of universities and colleges as places to receive a higher education fails to capture the whole story. In our capitalist economy, universities and colleges are businesses as much as meccas of education. Wellesley College operates on a business model that can afford the need-blind policy. GW does not.

Unfortunately, if schools like GW require more financial resources, or if tuition prices do not decline, changes in financial aid policy will affect prospective students and student demographics, especially in private universities. In the 2007-2008 academic year, the U.S. Department of Education found that just over 30 percent of all white students received scholarship grants based on need, compared to 52.9 percent of all black undergraduates. The need-aware policy is arguably a deterrent for minorities seeking a higher education.

Financial aid has become more necessary as tuition at private institutions soars. The U.S. Department of Education found that, after accounting for inflation, college tuition prices have increased by 137.2 percent since 1964. In the United States, total student loans tripled in the period from 2004 to 2012 and now total $1.1 trillion. Private universities are increasingly becoming commodities for the rich, while community colleges are more affordable for low-income families. The level of education available to Americans thus further stratifies the population.

When a college education is considered the great equalizer, it is hard to accept that parents’ income will determine what caliber of university a student can attend. It is impossible to force need-aware private institutions to accept low-income students when as businesses they cannot support such applicants.

However, in order to prevent excellent higher education from becoming a commodity available only to students born into rich families, colleges must either reduce their spending or acquire more financial resources. Adopting need-aware policies, although financially necessary, will only contribute to inequality within the American populace.

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