I think there’s nothing wrong with applying to schools that are only financial safeties. I also think there’s nothing wrong with also (not exclusively) applying to schools that you understand you can go to only IF the student gets accepted and financials work out, as long as the student understands just what a reach it can be.
One thing I have learned in this process is to be flexible with that list of schools. The list of schools my D actually applied to is different than the list of schools she was planning to apply to at the beginning of senior year. She agreed to pull one of her favorites off because we knew there was no way the financials were going to work out, but kept another one because she really wants to see if she can get in there (bragging rights). But the other thing that happened is that her safety offered her a larger than expected merit scholarship (their top one) a little while before she got deferred from her Ivy ED. It was this a ha moment when she realized that there were schools that were, in a way, competing to have her, rather than her having to compete to get into a top school. She has a study abroad goal, and that became a strong factor in choosing schools as well. She also came to the realization that she needs a graduate degree for her career goals, and graduating debt free from UG was actually as important as her parents had been telling her!
As I type this sick and in bed, she’s on an invitation-only scholars visit with her Dad as a finalist for two competitive merit scholarships at a school that was not on the list at the beginning of the school year. According to the text I got from DH, she told him she can totally picture herself going to school there. It probably helps a lot that we’ve told her that with the money she’s getting there, we will pay for summer and semester abroad. (And we still come out paying less than other schools she wanted to attend. win-win!) 