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As far as I understand it, they ignore FAFSA information but could probably still get an idea of the kid's background based on school, personal statements, etc. I'll admit, it sounds like this wouldn't be as effective for helping disadvantaged students. On the other hand, I think it gives schools plausible deniability for admitting a high number of students who wouldn't need financial aid, giving the school more money.

That is still an issue, but it is better than purposefully weighting admissions toward applicants who can afford full tuition.

What happens when those circumstances have disadvantaged a child in a way that cannot be recovered (for example, I've seen a documentary on over medicated children who were screwed up by the medication so badly that they still have clear issues even years after being taken off).