Oct. 23, 2013. -- George Washington University faced backlash from students and alumni this week as the campus newspaper reported that applicants had been led to believe admissions at the private institution were need-blind.
Administration officials acknowledged that some students who had asked for financial aid were put on wait lists merely because they could not afford the total cost of $61,918 to attend the private school.
The GW Hatchet, the campus newspaper, criticized the university's admission officers for failing to be honest with undergraduates, reporting that university officials even told students as recently as five days ago at an information session that it paid no attention to financial need in admission.
In December, the university revealed that for more than a decade it had "misreported" to U.S. News and World Report the number of its freshman class who were in the top 10 percent of their high school class. As a result, George Washington received an "unranked" rating.
"I am disappointed, but not surprised," Matt Corica, a 2007 graduate who lives in Randolph, N.J., wrote in an email to ABCNews.com. "Since I went there, the school has spent far beyond its means in an attempt to raise its profile and jump into the US News top 50; it makes sense that they would try to make up the difference by preferring full-boat over aid students at the margins of acceptance."
The news comes on the heels of a report today from the nonprofit College Board that even though average costs to attend the nation's four-year colleges and universities are stabilizing, the number of students receiving financial aid is shrinking.
Laurie Koehler, George Washington's newly hired associate provost for enrollment management, revealed that students who meet standards, but need more support, are wait listed in a Q and A provided by the university.
"I've been working hard on engaging the campus community more fully in the work of undergraduate admissions and trying to increase the transparency of admissions processes and policies," she said.
According to the university, about 10 percent of the 22,000 applicants in 2012 were put on the waitlist. Less than 1 percent of all waitlisted students are eventually accepted.
"Ten percent is an estimated maximum figure of those applicants, but of course, there could be as few as none," said George Washington University spokesman Dave Andrews.
How many moved to the wait list that are financial aid applicants "varies according to several factors such as the strength of the applicant pool, the financial aid budget and general economic conditions of the country," he said.
Last week, Koehler explained the "need aware" policy and had pledged to merge admissions and financial aid offices to boost enrollment and diversity.
Admissions representatives do not consider financial need during the first round of reading applications, she explained. But before applicants are notified, the university examines its financial aid budget and decides which students it can actually afford to admit.
George Washington officials provided this statement to ABCNews.com today:
"[The] story in the ... Hatchet may have given the impression that the university's consideration of student need in its admissions process has changed," it said. "The university's admissions practices have not changed with regard to how financial aid requests are factored in. What has changed is the new leadership in enrollment management. What we are trying to do is increase the transparency of the admissions process."
The university said that its policy is "need-aware," meaning that financial need is only considered during the end of the admission process. In the first review of applications, committees have "no knowledge of need."
"The Hatchet story suggests that the university's practice of need aware admissions automatically disadvantages students with need," the statement said. "Quite the contrary, our need aware admissions policy enables the university to provide more attractive aid packages for students with financial need while staying within our aid budget. More than 60 percent of our students receive grants from the university."
Many colleges and universities without hefty endowments use a "need-aware" policy, but observers and admission officers from other institutions say George Washington has, until now, been "dishonest."
"It is an issue of transparency -- GW was misleading their clientele by saying if you are poor, that will have no bearing if you get in or not," said Richard Vedder, director of the Center for College Affordability. "That's just blatantly not true. People got onto the waiting list and money was there to fund them, but if it wasn't there, they didn't [fund them.]"
"It isn't a poor school ... but compared to Harvard, Yale and even relative to Northwestern, Duke and Columbia, it wants to be in the top ranks and behave like it's in the top ranks, but they don't have the resources," he said. All those institutions have need-blind policies.
Vedder said George Washington's $847 million endowment isn't big enough to support need-blind admissions.
George Washington has been facing the reality that other high price-tag schools have been wrestling with since the financial collapse of 2007 took a bite out of endowment interest -- only a handful of top-tier colleges and universities can afford need-blind admissions.
Even Grinnell College, which, thanks to former trustee Warren Buffett has a $1.6 billion endowment, may be rethinking its generosity, according to a 2012 interview with NPR.
"It just became clear that if we continue to give more and more aid, the numbers don't add up," Grinnell president Raynard Kington told NPR.
Need-blind and underwriting about 62 percent of the average total cost of attendance, Grinnell is second only to Harvard University in what is known as its discount rate, according to a Grinnell spokesman.
Duke, with its $6 billion endowment is need-blind for U.S. citizens and legal residents and need-aware for international students. If admitted, the university meets the "full need" of all its students, according to Duke's dean of undergraduate admissions Christoph Guttentag.
"I thought it was unfortunate that a school of this caliber would find itself in that position," said Guttentag of George Washington.
"It's not an excuse, but it is an indication of the pressure that colleges face in a very competitive marketplace where people are paying attention to rankings," he said. "I don't excuse it, but these sorts of things don't happen in a vacuum."
With "greater transparency," more colleges will likely become need-aware, according to Guttentag. And if they are, he said, these institutions need to guarantee they can meet the full demonstrated financial need of all the students they accept.
Such is the case at Connecticut College, a small liberal arts school with a $211 million endowment, which has been "quite up front" that it is need-aware for the last 20 years, according to Dean of Admission Martha Merrill.
"A handful of schools can say they are need blind, but do they meet the full demonstrated need?" she asked. "We ensure every student who is admitted has their full need met."
Like George Washington, Connecticut College is need blind on its first reading of an application. Students that "sit on the bubble" – those students who may not have the strongest applications but have "something compelling about them" -- are sidelined for a look at their financial needs, said Merrill.
"At the end of the day, when we are ready to send out our decisions and have the financial information, we run some scenarios and run yield models and may find out we have overspent," she said. "I have a budget and I need to keep that budget."
Merrill said she "applauds" George Washington for clarifying its policy.
But George Washington alumnus Corica said he feels differently about the university and its lack of transparency.
"It makes perfect logical sense, in a really callous way financially," said Corica. "The school doesn't have a lot of money to spend on aid; they'd much rather use that aid in merit packages to entice better students to go to GW instead of Georgetown (or NYU, or BU), so they try to make up the difference by taking as many full-boat kids as they can stand to take. I think it speaks to the immense amount of pressure schools face to try to move up into the top 50."