November 25, 2008 (Arlington, VA) – With an economy in turmoil and college costs at historic highs, students and families will doubtlessly make critical college decisions with their financial well-being in mind. While almost all colleges and universities continue to admit students regardless of their socio-economic status, less than one-third of all colleges are able to offer financial aid packages that meet the full financial need of all of the students they admit, according to 
a report (Members Only) released today by the National Association for College Admission Counseling (NACAC).
NACAC commissioned the research to reassess ways in which financial need and financial aid are considered and utilized in the admission process.
“While the concept of need-blind admission was developed to ensure that students were not rejected due to financial need, admission practices that utilize differential financial aid targeting have emerged recently as colleges grapple with difficult aid allocation decisions,” noted William McClintick, NACAC President. “While such practices are, in many cases, well-intentioned, they provoke questions from stakeholders concerned about access for low-income students, fairness in college pricing, rising college costs, and the use of institutional aid.”
Other research findings include:
- Nearly four in five colleges use standardized admission test scores as eligibility criteria for institutional merit aid. The NACAC Commission on the Use of Standardized Tests in Undergraduate Admission recently reiterated the requirement, included in NACAC’s Statement of Principles of Good Practice, that colleges not use admission test cut scores as the sole criterion for financial aid eligibility.
- Colleges continue to increase the amount of merit aid offered to students at the expense of need-based aid. In 1994, colleges and universities overall reported that 27 percent of their institutional aid funds were merit-based and 66 percent need-based; in 2007, 43 percent reported that their institutional aid funds were merit-based, compared to 49 percent need-based.
- Control over financial aid and admission policy has increasingly shifted to enrollment management and/or financial aid managers, and shifted slightly away from faculty, presidents, and boards of trustees.
- Differential packaging of financial aid awards is heavily utilized by private colleges, though not by public universities. Colleges that practice differential packaging offered preferential aid packages most frequently based on academic merit (93 percent), particular talents (50 percent), and income level (39 percent).
The report was written by Donald E. Heller, Professor of Education and Director of the Center for the Study of Higher Education at The Pennsylvania State University, for NACAC. “There have been important changes over the years in how institutions are using financial aid for enrollment management purposes, and this report documents those changes and the current state of practice,” Heller stated. “The information in the report will be useful for college and university leaders, boards, and enrollment management professionals, as well as for policymakers in both the federal and state governments.”
About NACAC: NACAC is an Arlington, VA-based education association of more than 11,000 primary and secondary school counselors, independent counselors, college admission and financial aid officers, enrollment managers, and organizations that work with students as they make the transition from high school to postsecondary education. The association is committed to maintaining high standards that foster ethical and social responsibility among those involved in the transition process, as outlined in the NACAC Statement of Principles of Good Practice. For more information, visit www.nacacnet.org.