Our son received a letter from a university indicating that he was not accepted, and asking whether we want to be added to the regular waiting list or pay $400 and be added to the priority waiting list. This school was actually his second choice and we are still waiting to hear from his first. What do you suggest?
I would find out the time frame for when you will hear from your son's first choice. Ideally, you can avoid paying that fee. If he gets in to his first choice, you will be in good shape. If he doesn't get in, you'll have to evaluate how closely his second choice compares to his third choice. If you really feel more strongly about that school relative to the third and fourth choices, you might want to go ahead and pay the fee to increase his chances with the understanding that the "priority" list still doesn't ensure admittance.
Encourage your son to think broadly about where he is admitted. So many students are disappointed when they don't get in to their top two or three choices. In the long run, the important thing to focus on is preparing effectively for college before you go and doing well while you are there (I have a brother who went to University of Arizona and won a Rhodes Scholarship because he made the most of his state-school education).