Appying ED if you aren't sure of finances. Is it always a bad idea?

Applying to College
1

<p>D is not planning to apply anywhere ED, as of this moment, but I do keep wondering about it...</p>

<p>It seems the standard advice is NOT to apply anywhere with binding ED if FA is going to be an important factor. One school (Emory) specifically told us that in their info session, and most seem to follow suit. One school, American U, encouraged students to apply ED even if money is an issue. That surprised me!
My understanding is that even binding ED can generally be turned down if it turns out to not be affordable, but what constitutes not being able to afford it? We may have an amount in mind that we think we can pay, but if the school thinks we can afford more than that, would declining the ED offer then be breaking the contract?</p>

2

<p>What the college/university financial aid office determines a family can pay, and what a family believes it really can afford to pay often are two very different things, and the colleges/universities are fully aware of that. You get to decide it the ED financial aid offer isn’t good enough. Period.</p>

<p>If your family has a simple financial situation, and the Net Price Calculator at the college/university website produces numbers that your family considers to be affordable, then it may make sense for the student to apply ED. However, if there is anything at all “un-simple” about the finances (more than one property, divorced/re-married family, small business, etc.), then it isn’t likely that the NPC will produce reliable numbers. </p>

3

<p>“Always” is a bad term. Few things involving college are always a bad idea - ED can be a reasonable risk for parents who understand the situation and aren’t insistent on the absolute best deal. And, as you say, there is always the “can’t afford it” escape clause. </p>

<p>Say you had a kid who was a reach for Williams - which almost anyone is. Your EFC is $20K, You’d really like it to be less, but for Williams, you’ll sacrifice. Kid applies, gets in, but the EFC comes back as $25K. You squeeze a few more thousand out them, you’re at $22K. You don’t want to be there, you have an offer to a great school, it’s close, do you walk away and try and get a better offer elsewhere, or do you take it? Or do you go for the full ride at some place much lower?</p>

<p>As, long as you’re comfortable with a situation like that, sure, do ED. And I’d say the more prestigious schools are worth the shot, because they usually have the most money to give out. But if money is the absolute bottom line, no, shop for multiple offers.</p>

4

<p>Whether or not you can turn down an ED agreement may depend on the school you are applying to. Be clear - it is a contract, and a binding one at that. You would need to contact the specific school to see what the policy is, and read the contract carefully to see if it provides for a way to break the contract due to the financial aid package not meeting your needs. While some ED contracts may specifically state you don’t have to commit unless adequate financial aid is offered (and whether it is you or the school that gets to consider if it is “adequate”), at some schools you may have to pay a penalty to get out of it.</p>

5

<p>I think what MrMom62 is getting at is that do you want to put your child in the situation where she’s accepted into her ED school, probably her dream school, but she can’t go because she can’t afford it? It’s a different story RD because she has multiple acceptances and the decision of what school to attend is a process, but with ED it’s typically her first acceptance and the prospect of going there is so close.</p>

<p>Also isn’t there a rule that if you get accepted ED, you have to revoke your other applications? I’m not familiar with ED but I thought that was a rule. </p>

6

<p>I would think that it would be if you apply ED and get accepted and say “yes” then you need to inform your other schools that you have accepted elsewhere. Where ED gets tricky is when you haven’t seen your financial aid package yet and you need to make a decision. An ED could come in mid December but the financial aid package might come in April. You could get an estimate but not the final package and what if there is a discrepancy? If financial aid is paramount then RD is most likely the safest strategy.</p>

7

<p>A great perspective on this subject:</p>

<p><a href=“http://www.collegeconfidential.com/dean/early-decision-binding-financial-aid-seems-inadequate/”>http://www.collegeconfidential.com/dean/early-decision-binding-financial-aid-seems-inadequate/&lt;/a&gt;&lt;/p&gt;

8

<p>FA packages always come quickly after an ED acceptance, or rather, they should. Yes, you should withdraw your other applications, but until the FA situation is settled, there is no reason you have to - no sense cutting off your other options if the FA package is inadequate. Any problems should get worked out rather quickly, or they’ll let you know there’s nothing more they can do.</p>

<p>From what I’ve seen, the number of times the FA package doesn’t work out at top schools is very, very small, something like 2-3 % of ED acceptances. Most of the time it works out.</p>

9

<p>Interesting article @2dogs2kids, With all the warnings against applying ED if you aren’t sure you can afford a school, it does sometimes seem like another advantage for those who can pay full freight. (as mentioned in the article), and it is a system that sets people up to try to ‘game’ that system.
The urge to apply ED can be strong, with reports (however controversial) that it can boost your odds of acceptance, and, though most say it hurts your chance of being able to compare and perhaps request more FA based on another offer, others say that schools have more funds available early, or that they put their best foot forward for those who do apply ED.<br>
I wish more schools (or at least more of the schools on D’s list) would be non-binding ED, or EA. I’m actually surprised that so many kids can feel so certain of their choice already, but then again, we went into it thinking D wouldn’t have to decide until April. </p>

10

<p>

@MrMom62‌ is this from a study? I certainly think I’ve seen more than that % of complaints about ED FA offers on CC.</p>

11

<p>A lot of good advice here and some great issues raised. No, it’s not “always” a “bad” idea. Looking at ED yield stats alone, it seems to work out most of the time. Schools do want ED applicants to be sure things, so they tend not to stint on ED packages, IMO. In fact schools that do not guarantee to meet full need during RD, sometimes will do so for ED. </p>

<p>It comes down to the risks, pitfalls and how important getting the price down for colleges, as to whether ED is for a student. It’s also important to understand how ED works and to have some idea of what to do when the package is insufficient. It has has to do with even establishing a number that is affordable. The parents I"ve seen unhappy with ED after their students were accepted and it’s all a done deal, are the ones who then see from their kid’s classmates and peers all the possibilities that were not explored. Like, free tuition, honors college at Temple vs $35 K a year cost at Private U and with loans in that fin aid package. There is a lot of momentum, peer pressure, angst, in ED. When all of the emotion is removed, one can look at the process more reasonably.</p>

<p>When you have a student who has a clear first choice and you support it as a parent as something worthwhile paying the max you can afford for it, and having run NPCs for the school, it’s reasonable to assume it’s a workable arrangement, then you can’t go too far wrong. If the fact that other like colleges might give better aid, that you could do a lot better in terms of pricing and maybe even college choices, it may not be such a great choice. My son and friends were feeling the pressure to pick an ED school,since so many at his high school do go ED, and then it becomes a game in picking the best school with the best chance of admissions and giving up some preferred schools that are lottery tickets but still possibilities to any very good student with high test scores. At age 17 , to give up a shot at Princeton for a surer shot at Duke, doesn’t make sense to me. Go for it, is the way I look at it. Risk management for other things in life, sure. But this is something where one can give it a go. </p>

<p>A young woman, an acquaintance HAD to apply ED in her mind, and wanted it to be a sure thing. Can’t remember what she picked, but the aid package was mess. Parents owned a business and basically, she got no aid, and the the school wouldn’t budge. A lot of heartache and she applied to a bunch of other schools including a true lottery ticket for her , Duke. Accepted off the waitlist of all things, and with a bang up fin aid package. If her parents had managed to eke out what her ED school wanted, and they so sorely wanted to do so, came so close to doing so, but they just could not, and it pained them all so. very hurtful time. And it wasn’t even really the girl’s dream school–she picked the best bet for her to get accepted ED. She sold herself a bit short, and even then did not get the aid package needed. It was a bad idea for them, but you know…had that school accepted her with a doable package, she would have never known she could have gotten into Duke with a very nice aid package, and she would have sworn, as would have her parents that it was a great idea to go ED. As it all actually happened, they would tell you ED was a nightmare for them.</p>

12

<p>

</p>

<p>I’ve never found a study on it, which would be interesting, but rather it’s from my own observation of a sampling of elite schools own data when they publish it. Admittedly, that’s a rather small sample, and they often don’t publish it, but if you can find it, look for the difference between EDs admitted vs. matriculated. Every case can’t be because of FA problems, but even if it were, the number of EDs who don’t matriculate is very, very small at the schools I’ve managed to find data on. Dangerous to extrapolate that to all schools, but I’ve also never found any school that admits to a large number of EDs never matriculating for any reason.</p>

<p>As for the number of complaints about FA packages, I’ve come to realize that CC is a very, very small part of the college world. Things get amplified here that others in the real world never know anything about. As you well know, those complaints often contain an essential missing element or two that should have been a warning sign from the very beginning - like divorced families or family businesses or international status, etc.</p>

13

<p>Thanks for the explanation.</p>

14

<p>My son was just accepted to his ED school (Macalester) and his pretty generous financial aid package matched the NPC results very closely. And that is with a small business thrown in. I did contact the school’s financial aid office early in the process though, to make sure our business valuation methodology was acceptable to them. We would not have let him apply ED if we didn’t think the NPC was in the ballpark. I wanted to share our successful example of applying ED, with financial need and a small business. :)</p>

15

<p>You should talk to the GC of your D’s school. Some high schools have their policy on ED withdrawal. For my D’s school, if someone decline an ED admission, the school would only follow up with applications to in state public schools. Remember, there are still some documents to be sent from school even after an admission offer like mid year and final school report.</p>

16

<p>How does a school determine the amt of FA during EA if the FAFSA can’t be filled out until after the new year when W-2s are sent out?</p>

17

<p>^ I believe they give you a number based on your estimates that you supplied, with the caveat that if your actual numbers (after FAFSA) differ, the award amount may change. Hopefully someone else can confirm this.</p>

18

<p>That is correct. The package is not final until after you file the current numbers. Not positive about this, but if you know your numbers will be substantially different in the current year over the previous year, you can provide an estimate of what you think the real numbers will be. I’d check with the individual school’s FA office before doing this however.</p>

19

<p>@GMTplus7 We submitted the CSS Profile with 2014 estimates and 2013 tax documents. We are required to send 2014 documents when they are available and to file FAFSA after Jan 1. </p>