Learning how Reed juggles the needs of its students with its own priorities can help families become more knowledgeable about how financial aid is parceled out at colleges and universities. Although every institution has developed its own system, plenty of schools rely on the so-called “need-aware” policy that Reed uses.
An apt description of Reed would be academic rebel. More than a decade ago, it told U.S. News & World Report to take a hike. It adamantly refuses to cooperate with the magazine’s college rankings.
You can’t go to a football game at Reed because it shuns varsity sports.
Students at this liberal arts college, which is surely one of America’s
most academic environs, spend a tremendous amount of time reading
the classics.
Reed doesn’t believe in luring wealthy kids to its picturesque campus
by offering them money. In other words, while many colleges and
universities offer smart and talented kids merit money, Reed scoffs at
that carrot. It prefers dispensing the cash to smart students who couldn’t
attend the school without financial help.
Like other schools, what Reed does provide is need-based financial
aid. The college, according to the article, budgets for about 140
freshmen—or 40% of the incoming class—to receive aid. In reality,
about 53% of students at the school get some type of aid because some
qualify after their freshman year. The average individual package for
students is $29,950, and most of that comes from grants, which don’t
have to be repaid. Tuition and room and board at Reed was recently
about $46,000.
Here’s where the angst comes in: For years, Reed was on record
as being a “need-blind” school that accepted applicants without being
influenced by whether they could pay their own way. Despite the
policy, a small number of needy kids who found themselves clinging
to the bottom rungs of the school’s acceptance ladder each year
wouldn’t receive money. In the article, the dean of Reed’s faculty
observed that the policy was “almost cruel” because it suggested that
kids who were good enough for Reed were too poor to go.
The problem with maintaining a need-blind policy was that Reed’s
endowment couldn’t sustain its charitable intentions. Only two or
three dozen private schools, including the Ivies, are wealthy enough
to offer a true need-blind program. And in reality, some of these
schools accept students on a need-blind basis and then refuse to cough
up the cash later.
Many of Reed’s peers, such as Oberlin College in Oberlin, Ohio,
and Carleton College in Northfield, Minnesota, which are elite liberal
arts schools, use a “need-aware” policy. And that’s what Reed ultimately
embraced.
With Reed’s need-aware policy, the admission staff ranks the
applicants on a scale of one to five based on such factors as high school
grades, extracurricular activities, diversity, alumni status, and what the
school terms “potential.”
Under this system, the most desirable students are admitted and
offered financial packages based on their need. Not all the teenagers
who receive aid, by the way, are impoverished. Half of the families
report yearly incomes of more than $50,000.
During the admission process, the school doesn’t start considering
a family’s financial capability until the aid budget is tapped out according
to an in-house formula that tries to pinpoint how many accepted
applicants will actually show up in the fall. The applicants who fall into
the need-aware category and require financial assistance can be
rejected. The policy typically hurts fewer than 100 students a year out
of more than 3,000 who apply.
In talking about the policy in the article, Colin S. Diver, Reed’s
president, acknowledged it isn’t perfect, but it was the best the school
could devise for now. “We decided it was better to be open and admit
to the fact that at some point we run out of money.”
Action Plan
Keep in mind that the vast majority of schools don’t enjoy unlimited
financial resources. Consequently, it’s important to look for
schools that match a student’s academic profile.
Source: The College Solution: A Guide for Everyone Looking for the Right School at the Right Price
