The Washington Post offers a look into the economics of college financial aid. According to this article, top tier colleges who attract the top students only offer discounts to those who can not afford the sizeable tuition. The schools below the top tier used to behave similarly, but over the last 15 years have caught onto the ideas taught in their Econ 101 courses. Instead of using financial aid merely in a charitable capicity, colleges are employing it as a tool for attracting better students to their schools. Desirable applicants get preferred packages with more grants than loans, and marginal applicants may be accepted if they agree to pay full price. The resulting offers make it difficult for parents and students to determine what the best value is for their situation. Is the school with the bigger reputation that is offering not much aid worth it over the not so bad school that’s offering a hefty discount? Schools may employ help from “student enrollment management” experts to package their deals. I suspect parents are calling financial advisers for help on their side. (bonus links: Harvard’s financial aid information; many top schools continue with “need-blind” admissions, despite the financial hurdles; Brown, the only Ivy without need-blind admissions has plans to change)