When would-be college students apply for financial aid using the FAFSA, they are asked to list the colleges they are thinking about attending. The online version of the form asks applicants to submit up to 10 college names. The U.S. Department of Education then shares all the information on the FAFSA with all of the colleges on the list, as well as state agencies involved in awarding student aid. The form notes that the information could be used by state agencies, but there is no mention that individual colleges will use the information in admissions or financial aid -- and there is no indication that students could be punished by colleges for where they appear on the list.
But the list has turned out to be very valuable to college admissions offices and private enrollment management consultants: They have discovered that the order in which students list institutions corresponds to students’ preferred college.
Now, some colleges use this “FAFSA position” to deny students admission, said David Hawkins, director of public policy and research for the National Association for College Admission Counseling.
So the institution is disinclined to use up a precious admissions slot for a student who is unlikely to enroll.
Besides turning away students who put their institution further down the list, some college officials may also be offering smaller aid packages to students who list their institution highly, according to several prominent higher education consultants who advise institutions across the country on enrollment practices.
This could be happening because students are more likely to pay whatever it takes to attend the college of their choice... The use of the list on the FAFSA is just another example of how colleges are using increasingly sophisticated data mining techniques to recruit and shape their classes.
...The practice also raises questions of inequality, since it does not affect affluent students who forgo applying for student aid.
While ACT and College Board have long earned a lot of money by selling students' names, it’s not clear why the federal government is revealing information to colleges that could be used against students. Some outsiders suggested the Department of Education’s current practice is easier on the department -- otherwise, it would have to find a way to scrub each and every one of the FAFSAs of the names of other institutions.