What is need-blind admission?

What does it mean?

Need-blind admissions means that a colleges does not take into consideration students’ financial aid status when making admission decisions. This is the opposite of need-aware admissions where a college does consider students’ financial need as part of the admission process.

For most private colleges, this isn’t an either or situation. Often, a certain percentage of the class will be admitted under need-blind conditions with the remainder of the class admitted under need-aware or need-sensitive conditions.

How does it affect how much you pay for college?

This can affect how much you pay for college because not all colleges that are need-blind commit to meeting 100% of student need. In other words, you can be admitted to a school without any consideration of your financial need but you may not receive the financial aid you need to attend.
 
For example, you could be admitted into NYU regardless of your need. However, if you have significant need, chances are you won’t be able to afford to attend since on average NYU only meets 70% of need and less than 10% of freshman have their full need met.
 
Compare this to Union College which is need-aware but met 100% of student need last year. They explain their policy as follows:

At Union, we have a pretty generous financial aid budget – about $30 million per year. But we are need aware, meaning a student’s ability to pay is factored into whether or not he or she will be accepted. Some don’t think it’s fair, that some students might be rejected because they can’t pay. But here’s our perspective: once we admit you to Union, we will find a way for you to attend. We will put together a realistic financial aid package based on your family’s ability to pay, and you will most likely be able to afford our school.

That’s comforting to students. An acceptance letter from a school like Union means they can actually go. They’re really in.

The entire article is worth reading.
 
Ultimately, you could be paying much more to attend a need-blind college if it isn’t committed to meeting 100% of financial need.

Where can you learn more?

Do Colleges Need to Be Need Blind? includes a detailed description of four colleges that have changed their status and the results.
 
List of Need-Blind Colleges and Universities from 2015.
 
Need-blind vs. Need-aware: Be Aware includes useful table of need-blind, need-aware options.