A few days ago I wrote a post providing some of my predictions about how the credit crunch will affect college admissions. The New York Times ran a story yesterday about how both rich and poor colleges are reacting to the economic downturn.
There are two points from this article I want to emphasize.
First, colleges and universities will try their best to freeze or reduce their expenses. Representatives of colleges quoted in this article talk about hiring freezes, salary freezes, and putting building or renovation projects on hold. The plan is not to reduce financial aid offered to incoming freshmen. I feel that the the press is exaggerating the effect of the credit crisis on the dollars colleges will devote to financial aid, largely because they do not understand that most financial aid is not actually money, but discounts off the full price of tuitoin.
The second point has to do with “need blind” admissions. All colleges would like to be able to admit students regardless of their ability to pay. However, only the most wealthy colleges can be “need blind” in their admissions policies, and even they are never fully blind to the financial implications of the admissions process (more on this topic in another post). The issue is not that colleges will have fewer dollars to offer, in absolute terms. It’s that more students may have more need this year, because families’ financial situations may be more bleak this year than in the past. With assets having been decimated, the financial aid formulas will require colleges to spread around their financial aid dollars in creative ways in order to build the class that they want.
The effect, then, is that colleges will have to lift their blinders and take a cold, hard look at their budgets–as well as the credentials of the students seeking admission. As I mentioned in my previous post, it will thus be easier for full-pay students go get into competitive colleges.
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