No, I don’t think that is far-fetched, and I’m sure that it happens sometimes (even at “need blind” schools.)
On the other hand, 90% of students apply for financial aid, and most of them ending up going to school somewhere. Most schools below the elite level are “need blind” out of necessity - there aren’t enough qualified full-pay applicants to fill their classes.
There is really only a small group of schools that care about this:
- Elite schools that care about their admission rates AND
- Have policies of providing generous financial aid BUT
- They don’t have a 36 billion dollar endowment.
The vast majority of schools just don’t care - they let you in, and if you can’t afford it, you go somewhere else.