How does Early Decision for a financial standpoint?

[Anonymous]

Our DD is applying to colleges next year and we're not sure how ED works from a financial standpoint. We get that you are committing yourself to that school if you get in, but we'll need aid or scholarship money to pretty much any school. If you apply for ED and are accepted but not given any aid from the school, are you still on the hook? How can you force someone to go to a school you can't afford....

[Anonymous]

The decision is binding--meaning you withdraw applications to other schools once accepted. Sure, they can't force you attend, but there are hurdles then to getting in to other schools.

If you apply early decision you should check the net price calculator of the school you are attending entering as accurate information as possible. They will give you a realistic estimate of what your EFC will be and the anticipated financial aid package. You base your willingness to attend the school based on whether you'd still attend if that's estimate is reasonably close to the offer. If you're unsure--or want to compare competing financial aid packages of different schools more than you want to commit to this one school--then you shouldn't apply ED. If your financial situation changed dramatically or the college failed to meet the need reported in the net price calculator you could make a case to break the binding relationship--but you shouldn't go in thinking that you can just do this if need be.

Don't get thrown by the x school fills half their class ED comments--these aren't paying attention to the issue of yields at schools. Once ED got to a scale that distorted the application process, there are quite a few schools that accept a much, much higher percentage of RD candidates than they can expect to enroll because they know these kids are applying to a lot of schools. If you really want to know the competitive edge ED gives you at a school compare the profiles of students accepted ED and RD. If you take out recruited athletes, for a lot of schools there's very little difference. The differences are diminishing as more students apply ED.

[Anonymous]

Anonymous wrote:Our DD is applying to colleges next year and we're not sure how ED works from a financial standpoint. We get that you are committing yourself to that school if you get in, but we'll need aid or scholarship money to pretty much any school. If you apply for ED and are accepted but not given any aid from the school, are you still on the hook? How can you force someone to go to a school you can't afford....

They can't force you. But ethically you are supposed to apply to schools you can afford if selected. It's not "conditional early acceptance."

[Anonymous]

Anonymous wrote:Our DD is applying to colleges next year and we're not sure how ED works from a financial standpoint. We get that you are committing yourself to that school if you get in, but we'll need aid or scholarship money to pretty much any school. If you apply for ED and are accepted but not given any aid from the school, are you still on the hook? How can you force someone to go to a school you can't afford....

You are advised to run your data through the school's net price calculator, which will get you an estimate of what your aid package would look like, before submitting the ED application.

If you are admitted to the school, a financial aid award will be made at the same time. If the amount of aid is lower than what the Net Price Calculator projected (assuming data provided was consistent) you can get out of the agreement. You can also get out of the agreement if your financial situation dramatically changes from when you submitted the application (e.g. job loss / death of parent / accident where parent becomes disabled).

Otherwise you are on the hook to say yes. They can't really force you to attend and I don't think anyone has been sued, but they could very well tell other schools yoru child is applying to that you reneged on an ED agreement, and it creates problems for your child and their high school counselor (who is also supposed to sign that they have advised your child of the seriousness of the ED agreement.

[Anonymous]

You can’t get out for financial reasons if they come back with a counter offer and schools do. So you truly need to be 100% sure that is the only school you want and will pay the price they come with or come back with.

Financial aid need is not the reason to think you have an out. And if you need financial aid, most people just apply EA and RD so they can compare packages offered by many schools for the best fit.

[Anonymous]

Anonymous wrote:Our DD is applying to colleges next year and we're not sure how ED works from a financial standpoint. We get that you are committing yourself to that school if you get in, but we'll need aid or scholarship money to pretty much any school. If you apply for ED and are accepted but not given any aid from the school, are you still on the hook? How can you force someone to go to a school you can't afford....

Yes, it obligates you.

That's why ED is really for full-pay applicants.

My DC knows what his first choice is, but he needs merit aid to attend - so he can't apply ED.

[Anonymous]

It's essentially affirmative action for people who don't need financial aid.

[Anonymous]

Anonymous wrote:It's essentially affirmative action for people who don't need financial aid.

I can think of multiple people I know who went to schools they could never have gotten into without their parents' ability to pay full tuition. Schools figure they can use their merit an financial aid to bring in actually good students who will offset the lesser ones from wealthier backgrounds.

[Anonymous]

Anonymous wrote:It's essentially affirmative action for people who don't need financial aid.

Not quite true. If the school's net price calculator shows you getting aid then you will get aid if you apply ED. The people who struggle with it are those who don't qualify for aid due to high income but haven't saved enough to pay what the FAFSA/CSS profile indicate you can. Those are the folks who can't really do ED safely.

[Anonymous]

Anonymous wrote:It's essentially affirmative action for people who don't need financial aid.

I see no problem rewarding people who saved at the expense of those who spent.

[Anonymous]

Anonymous wrote:It's essentially affirmative action for people who don't need financial aid.

Its not affirmative action. Someone has to pay or they cannot keep the school open. Many of us save from the time our kids are born and live modestly forgoing things like vacations to put that money away for college. So, yes, I think my kid should get some benefit to it than another kid whose parents have the same income or higher who choose not to save and lives much more comfortable life.

[Anonymous]

DS wanted to apply ED to a school where he was being recruited as an athlete but where his stats were a bit above the school's average. In his case, the high school sent in a transcript over the summer before senior year, we had SAT scores in hand, and the admissions office did a pre-read of the application and provided a letter stating aid. "If you apply early decision, you will receive at least xx in merit aid." I read somewhere that some schools will now do this even for non-athletes, but not the super selective schools.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It's essentially affirmative action for people who don't need financial aid.

I see no problem rewarding people who saved at the expense of those who spent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It's essentially affirmative action for people who don't need financial aid.

Its not affirmative action. Someone has to pay or they cannot keep the school open. Many of us save from the time our kids are born and live modestly forgoing things like vacations to put that money away for college. So, yes, I think my kid should get some benefit to it than another kid whose parents have the same income or higher who choose not to save and lives much more comfortable life.

Some of us have saved and lived modestly from the time our kids were born and despite that, cannot pay $70+K/year per kid for college, and do not qualify for need-based aid.

It must be soothing to live in such black and white terms.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's essentially affirmative action for people who don't need financial aid.

Its not affirmative action. Someone has to pay or they cannot keep the school open. Many of us save from the time our kids are born and live modestly forgoing things like vacations to put that money away for college. So, yes, I think my kid should get some benefit to it than another kid whose parents have the same income or higher who choose not to save and lives much more comfortable life.

Some of us have saved and lived modestly from the time our kids were born and despite that, cannot pay $70+K/year per kid for college, and do not qualify for need-based aid.

It must be soothing to live in such black and white terms.

And that is why there are a variety of college options at a variety of price points. A family should guide a student toward schools that fit within the budget. Look at it like buying a house or a car. There are luxury options, there are practical options, and there are bargain options. There is a college for everyone. And before you argue that everyone should have access to the top rated options, consider that every option can have a successful outcome. A top-rated college does not provide any guarantee of a successful career, and often provides zero advantage as compared to a lower rated reputable school. You can get from point A to point B successfully in a BMW, a Nissan, or a Hyundai. You just need to choose the one that suits your budget.