<p>"How much can it really change, year to year? Swarthmore is only enrolling 375 kids a year. What's the most the mix could possibly swing? 30 more need students? That's only $1 million on a $116 million operating budget. Need-blind full-need means that the board has pre-authorized spending whatever it takes in financial aid to meet the need. But, it's easy for the board to do that, because what's the most it could swing, even if you just threw darts to pick 'em in the admissions office?"</p>
<p>A situation like this would put an admissions dean in hot water at most schools, actually, because it would mean they aren't communicating basic information about their applicant pool well to others at the school. An extra $1,000,000 in a financial aid budget at Swarthmore, for example, probably would require around an extra $20,000,000 to $25,000,000 invested into the school's endowment the prior year for this purpose (schools usually use about a 4 to 5% return/interest on the endowment to fund their annual budgets - so think about how much money the schools that are going no loan are needing to raise to do this - at Brown, for example, going no loan requires them to have an extra $4,500,000/year in their financial aid budget - that's an extra $100,000,000/year needed in their endowment. Considering they are projected to lose about $800,000,000 this year thanks to the economic crisis, it becomes clear that them maintaining this no loan policy is going to be tough!). Admissions deans use complex yield models to project who will come and who may not. The way they prevent a surprise for the financial aid office is to take a look at the applicant pool in January, when all applications are in, and give the FAid Office and Budget Office a rough idea of how many students have indicated they intend to apply for aid. The FAid Office then uses its own yield model to project a probable aid budget, usually based on historical data from past incoming classes. Fingers are usually crossed that the Board has approved enough to cover the need of the entering class (and the 3 others!). FYI - usually, after salaries, financial aid budgets are the largest line items in a need-blind school's budget. </p>
<p>This year, from what I have gathered from my colleagues at a variety of schools, seems to have admissions deans and financial aid folks a bit nervous, as more kids are applying to more schools and more families are indicating they will apply for aid. There is a certain level of crapshooting involved, but there is usually enough cushion in the financial aid budget to cover additional need. That being said, an extra $1,000,000 is HUGE at most schools, especially when you would have roughly a month to figure out from where you're going to get it!</p>