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I've also heard that some Panhellenics black out that section, except for the sorority to which it applies.
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This is probably a stupid question, but is this literally blacked out? Because if so, the other sororities would know she is a legacy, but just wouldn't know to which org or orgs. The damage would still be done (so to speak.) Actually, why does PH ask if a PNM is a legacy? It seems that this is information that is really between the PNM and the GLO. If a PNM is really a legacy, then the appropriate parties will know how to get that information to the chapter.
I am a volleyball coach, and a few years back when I was working with high school girls, I helped some with their rush apps. Some were embarrassed that they left the legacy section blank - thinking this made them look less desireable, as not being a Greek blue blood, I guess. They didn't understand that not being a legacy could help them during recruitment.
Also, my biological little sisters went to a school that didn't have my GLO (but it does now!

). Anyway, the first to rush got a fair rush, because her status as an AOII legacy did nothing to hurt her, since we weren't on campus. My second sister though - totally different story. In my opinion, she is the girl every chapter would want. After first stage no one dropped her, second stage, every chapter dropped her except her legacy chapter and the smallest group on campus. She is fantastic and went on to be Top 10 freshman, Greek Woman of the Year, Summa cum Laude, the list goes on and on. With all that, everybody dropped her because she is a legacy! It makes for an unfair rush because the GLOs basically make the choice for her. The basic unspoken rule at that campus is, if you are sure you don't want your legacy house, cut it immediately or everyone else will cut you, assuming you are going to the legacy chapter. So, the PNM has to make that choice so early on that she can't be making an informed decision.
ETA: It seems that legacy status is part of a campus culture thing. At some campuses it is unbelievably important, and at others it doesn't seem to matter at all.
ETA some more: I said that she was dropped because she was a legacy. Of course I don't actually know that is true.