By Julia Kaganskiy Even before the financial markets began to tumble, experts predicted that this year’s graduating class would be subjected to one of the most competitive college admissions environments on record, with a particularly large population of high school seniors pushing college application numbers ever higher. But now that the economic downturn has entered into the picture, the admissions landscape may be changing even faster than expected, and students could find themselves disappointed or even distraught when the acceptance and rejection letters start pouring in. With budgets slashed, many colleges are taking measures that will effectively make the admissions process even more selective, so if you’re applying to college, we suggest you look into the financial situation of each of your target schools and reassess your list before sending those applications off. Private Colleges For most private universities, the school’s endowment is its lifeline. So when a financial crisis causes donations to dry up or the school’s stock portfolio to plummet, colleges have to find ways to cut costs. CNNMoney reports that Moody’s, the financial research and ratings service, has projected a 30% decline in the value of college and university endowments in general this fiscal year. In one notable example, Harvard, the world’s wealthiest institution of higher learning, announced last Tuesday that its endowment had lost more than $8 billion over the past four months. What does that mean for admissions? Admirable programs like “need-blind” admissions policies could be jeopardized at many of the schools that offer them. That means that some students who need cash may be rejected in favor of those who can afford to pay full tuition or require less financial aid. According to a report released by the National Association for College Admission and Counseling (NACAC) this November, less than one third of all colleges are able to offer financial aid packages that meet the full financial need of all the students they admit. Even the schools that maintain their need-blind programs may not be casting a blind eye after all. In a recent press release, NACAC President William McClintick noted that, “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.” But with college tuitions rising to such astronomical highs (with Sarah Lawrence College coming in as the most expensive with a total cost of $53,166/year), most students need cash. A recent article in The New York Times reported that from 1982 to 2007, college tuition and fees increased 439 percent, while median family income rose just 147 percent. Over the past decade, student borrowing has doubled and, on average, students from lower-income families receive smaller grants from colleges than students from more affluent families. “Last year, the net cost at a four-year public university amounted to 28 percent of the median family income, while a four-year private university cost 76 percent of the median family income,” reported the Times. These findings are worrisome, all the more so now that many families have taken a hit on the stock market or suffered layoffs. College is becoming a luxury that fewer can afford at a time when student loans are becoming increasingly difficult to obtain. A survey administered by the scholarship-matching website FastWeb found that nearly half of student loan applications are being denied. Those who find that they can no longer afford tuition at a private school might look to more modestly priced public universities—but those schools are facing a host of problems of their own. Public Universities The top public universities will soon be in higher demand than ever before, and may even draw the caliber of applicants typically reserved for Ivys as the best and the brightest of the broke vie for a quality education. SUNY Binghamton University, for example, received over 50% more early applications this year than at any time in its history. But public universities have financial problems of their own, as the state governments that provide much of their funding have been hit hard by the economic downturn. In California, Governor Schwarzenegger has proposed a $4.8 billion cut in education services. The UC system recently announced a midyear $65.5 million budget cut, on top of a $48 million reduction that was already approved earlier this year. And the California State University system has also announced that it will be accepting 10,000 fewer students this year due to financial constraints. With well-heeled private institutions like MIT trimming expenses, it’s no surprise that public universities across the country are feeling the squeeze. In a recent article, The New York Times reported that “the University of Florida, which eliminated 430 faculty and staff positions this year, was told recently to cut next year’s budget by 10 percent, probably requiring more layoffs. Financing for the University of Massachusetts system was cut $24.6 million for the current fiscal year.” So as more students are applying to colleges overall, and financial issues lead more people to apply to public schools, public universities may begin to admit fewer students because of severe budget cuts—all this while dramatically diminishing resources may jeopardize the quality of the education public universities can offer. What can you do? 1. Reassess your financial situation. What can you afford to pay? Play it safe and prepare for the worst; who knows where the economy will go in the coming months? Get a figure on paper and see which schools are in your price range. 2. Re-compile your list of schools. Taking into account the concerns outlined above and your newly calculated price point, reconstruct a list of reach, target and safety schools. Evaluate the financial situation at each school and consider how it might affect your chances of admission. 3. Apply to more safety schools. Because the financial situation may skew the qualifications for admission and tip the applicant pool so that grades and test scores increasingly have to compete with checkbooks, some of your target schools may now be considered reaches. Even if your own finances are stable, consider how the economy might affect admissions at your target schools and whether the schools might be experiencing an unprecendented influx of applicants that could place you out of their acceptance pool. You should probably add at least 2-3 more safeties to your list and consider schools one or two notches below your previous baseline. It’s better to be safe than to find out in March that you’ve been rejected from most or all of your choices. 4. Visit Unigo.com for a list of schools under the $20,000 price point. 5. Consider Community College. It may not be your dream school, but if you and your family simply can’t afford to pay for college right now, it’s a practical and, most importantly, affordable alternative. Plus, it’ll buy you some time. A two-year program at a community college will give you time to see if the market stabilizes and can allow you to try to save up some money to transfer to a public university after you receive your associate degree. 6. Fill out your FAFSA. And get it in early. They say that the earlier you submit your FAFSA application, the greater your chance of receiving the full amount of financial aid for which you qualify. 7. Look into private student loans. Visit the FinAid website for all your private student loan needs. Check with your bank or local credit unions, as well as other private student loan providers. The interest rates at these lenders will be higher than those of federal loans, but at least you’ll be able to pay for school if federal loans won’t cover all your costs. You should be aware that a large bank may turn you down, so finding a local bank or credit union may increase your chances of securing a loan. A few more excellent tips from college counselor and education blogger Mark Montgomery: 8. Develop a “top 25%” strategy that will help increase the likelihood you will get the aid you need. While there is a great deal of variation in financial aid policies, most colleges shower their best financial aid packages on those students in the top 25% of their incoming class. Colleges routinely report the average ACT or SAT test scores by identifying the “middle 50 percent” range of scores of admitted students. So if Elmer Fudd College reports an middle 50% ACT range of 22 to 26, this means 25% of students scored lower than 22, and another 25% scored 27 or higher. An applicant to Elmer Fudd College with an ACT of 29 has a much better chance of receiving a solid financial aid package than the applicant with a 22. 9. If you plan to take out a loan to partially finance an education, start shopping for that loan now. Do not wait until admissions decisions are made. Learn what loans are available (or not) so that you can make a realistic plan for how much you can borrow. This knowledge will make it easier to compare financial aid packages later when they are finally announced. 10. Don’t assume that your in-state colleges and universities offer you the best deal. As an example, see my post here about cost comparisons for a Colorado student considering University of Colorado vs. Montana State University or the University of Wyoming.