The Big Mistake Students Make When Filling Out FAFSA

As the flurry starts to die down around applying to colleges, there is a new issue for students and their families to consider. Students may have to be just as thoughtful about filling out the FAFSA as they were about completing their college applications.
 The Free Application for Federal Student Aid (FAFSA) can be prepared annually by current and prospective college students to determine their eligibility for financial aid. The application is the access point of consideration for many federal student-aid programs, over 600 state aid programs and most of the institutional (college) aid available to help students pay for their education.
 The U.S. Department of Education begins accepting FAFSA applications on Jan. 1 for the upcoming academic year. Students can send the FAFSA to up to 10 schools at a time; when you complete it, you are asked to list the colleges to which you are applying. The Education Department then shares the information on the FAFSA with all of the colleges on the list. What most students may not realize is that the order in which they list those schools could influence their admission chances or their aid award. 
 Some claim the order in which a student lists colleges directly corresponds to the student's college preferences. That may not be true of all students, but there is some data that supports this assertion. Anecdotally, when I review a student's college list, I see that many do prioritize it automatically. It's the nature of making lists and rankings ... you tend to put your top choices at the top. It is even more likely for teens, who have just gone through one of the most stressful periods of their high school years. As they research and select colleges to apply to, complete applications and fill out many different forms, they seem to naturally prioritize their colleges. In fact, a number of colleges ask this same question on their own applications, and, although theories abound, no one really knows how they use this information.
 If students do, in fact, list schools based on how they rank them, then the list could prove valuable to college administrators and enrollment managers who are concerned with yield and distribution of institutional awards. Many college advisors, financial aid counselors and professional organizations express concern about this observation. "The student has no idea that this information is being used in this context," said David Hawkins, director of public policy and research for the National Association for College Admission Counseling. The federal government ... doesn't indicate it. And institutions certainly aren't telling students they are using it ... this is a concern from our standpoint." Hawkins thinks that mostly private colleges would be inclined to take the student's list into account, since they are trying to predict and improve their "yield" - that is, the percentage of applicants offered admission who decide to enroll. Although Hawkins declined to name specific colleges that are doing this, he maintains that some are. 
 Many have concerns about the lack of awareness regarding this practice, rather than the fact that it happens. If you are not aware, you can't formulate a counter strategy. Others may experience dismay or even outrage at the realization that colleges act like businesses. They can and do use data to enhance their own bottom line. Just because they are in the business of education does not make their behavior less rational, but it does sour those who are under the impression that institutions of higher learning prioritize the welfare of their students over their own financial health. 
 Aside from rejecting students who may put their institution lower on the list, some colleges may also offer smaller aid packages to students who list their institutions at the top - why provide an incentive to a student who is already likely to enroll? Many families tell me they are willing to 'do whatever it takes' to enable a child to attend their first choice school.
 It is unclear exactly how critical this situation actually is. Colleges have many ways of assessing student interest, including whether they visit the campus, write early and often for information, attend regional events hosted by the school, register for an interview and so on. From my perspective this is just one of many factors a college may take into account when making an admission or financial aid decision. 
 Due to the many who express concerns, the Education Department is looking into this matter to determine if change is needed regarding the information they release to colleges. For now, private college consultants (many of whom are just becoming aware of the issue themselves) are advising their clients who use the FAFSA to list colleges in alphabetical order to avoid having the list be used in decision-making. My own recommendation is when you fill out the FAFSA, list the in-state public institutions in priority order at the beginning of your list, since some states may require you to list state schools first to be considered for aid; then list the private schools right below them, in alpha order. This strategy demonstrates clearly to colleges that your list has been both categorized and alphabetized and helps avoid the use of these data for enrollment management purposes.