How Does Early Decision Affect Financial Aid?

Early decision (ED) is when a college accepts a student months before the regular acceptance date. Although ED can help secure a place at your top school, it comes with a catch: If accepted, you must attend that school.

This binding agreement could be a problem for students needing financial aid. For starters, ED prevents you from comparing financial aid packages from multiple schools.

Here are the basics about early decision, financial aid and how to determine if ED is right for you.

1. You can’t compare financial aid packages
2. You might not get merit-based scholarships
3. You might still be waiting to hear from scholarship organizations
4. The applicant pool could be more competitive


Early decision versus early action
Is early decision worth it?

1. You can’t compare financial aid packages when you apply early decision

What does early decision mean? Basically, you select just one college as your top choice for the fall when applying for early decision (ED). Although you can apply to other colleges, you must agree to attend your ED school if accepted.

ED admission results are usually sent by December, far ahead of the typical March or April timeline for regular applications. Instead of stressing about college decisions in your final semester of high school, you can rest assured that you got in.

However, you won’t get the chance to compare financial aid packages with this approach. You’ll receive one offer and will have to take it or leave it. If the financial aid package falls short, you’ll likely need to take out student loans or break your binding agreement.

Fortunately, students can usually turn down an ED offer if the financial aid is too low, especially if the school’s cost of attendance is more than they can afford. But once you decline the ED admission, your offer disappears. You’ll never see how your dream school’s financial aid package compares with other colleges on your list.

2. You might not get merit-based scholarships

If you have your heart set on a particular school, applying early decision is one way to show enthusiasm. With this approach, you agree to attend if you’re accepted. Since colleges naturally want students to accept their admission offers, they tend to prefer ED applicants.

However, most colleges use merit aid to attract great students. Because of this, a college might not see the point in offering you merit aid since you’re already committed to attending.

In some cases, selecting a school through early decision might reduce your chances of receiving a merit-based scholarship.

3. You might still be waiting to hear from scholarship organizations

Along with financial aid, you’re probably pursuing scholarships to help lower your college costs. The problem is that some scholarship organizations don’t notify students of their awards until the spring of their senior year.

With ED, you must accept a school’s offer well before the typical May 1 decision day. For low-income students, this deadline might feel too rushed to decide on a college.

If you’re relying on scholarship money to pay for college, applying early decision might not be the best financial move.

4. The applicant pool could be more competitive

Statistics show that ED applicants are accepted at a higher rate than those who apply via regular decision. For instance, John Hopkins University typically has an acceptance rate of 9%, but this jumps to 31% for ED students.

However, the ED pool tends to include highly-qualified candidates who can put together solid applications in the fall of their senior year. Overall, the early decision process is believed to have the most competitive applicants, possibly making it harder for your application to stand out.

If you’re rushing to apply, you might be better off waiting for a later deadline. Although using ED can work in your favor, it’s generally not worth it if you send a subpar application just to meet an early deadline.

Early decision versus early action

Early decision is often confused with early action, since they both have early deadlines (typically in November) compared to regular college admissions. However, there are key distinctions between the two application processes:

  • Early decision (ED): You submit your early decision application by the school’s deadline and typically receive results in December. If accepted, you must attend that school and withdraw other college applications. You can decline the offer only if the financial aid package isn’t enough to meet your financial needs.
  • Early action (EA): You apply early and typically receive a response by January or February. You’re not obligated to accept this offer and have until the national deadline (May 1) to respond.

The main benefit of early action is receiving an early acceptance, which ultimately saves time and energy from applying to more colleges. However, certain schools, such as Harvard and Princeton, only allow you to pursue one college for early action, although you may apply using regular decision for other schools.

In general, early action allows more flexibility when choosing your future college. You can wait for multiple offers, comparing tuition, financial aid packages and other pros and cons. With early decision, you’re locked into attending that school, even if you receive a better offer at another school.

Is early decision worth it?

Most experts agree that ED leads to higher chances of acceptance to college. But applying early decision also prevents you from comparing multiple financial aid packages.

If you’re interested in applying for early decision, make sure these four statements are true for you:

  • You’re prepared to apply. ED deadlines typically fall in November. If your essay, recommendation letters or test scores would be more robust in a month or two, you’re probably better off waiting for the regular decision.
  • You’re confident about your dream school. Since early decision is binding, you must feel 100% about this particular college. If you have cold feet, consider applying early action or regular decision instead.
  • You’ve done your financial aid homework. Even if you can’t compare financial aid offers, you can estimate your ED school’s financial aid package. Use the college’s net price calculator (found on their website) or the Federal Student Aid Estimator to predict your need-based aid. But remember, this tool doesn’t consider any merit-based assistance you could get.

You’re prepared to apply elsewhere if your financial aid package falls short. Even though early decision is binding, you can turn down an offer if it has an insufficient financial aid package. Prepare for a Plan B situation by submitting applications to backup schools. Although you can submit only one ED application, you can send multiple applications under the regular admissions plan. (Just be sure to withdraw those applications if you accept your ED offer).

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