Beware the standard ED trap: disappointing financial aid

About this time every year we see multiple posts from Penn ED applicants who were accepted and then find that the FA packages they were offered were insufficient to allow them to attend.

That is inherent with ED.

With EA or SCEA admissions, students have the option of applying to peer schools RD and then comparing and requesting adjustments in FA packages based on awards from peer schools.

With ED, that option is not available.

Students for whom solid financial aid packages are critical should avoid ED.

I don’t agree. Low income students will definitely get a great FA package from Penn (full-ride or almost full-ride) so that is not an issue. For Upper-middle class students who require little FA , ED is also a good option.

Now for middle class kids who require substantial FA, comparing FA offers can be of a lot of value. But still, they can apply to Penn ED and if they get insufficient aid, they can appeal. If their appeal is not successful then they should break the ED contract and go ahead with their RD apps which they should have been preparing anyway.

ED provides a major boost to an applicants chances so not using it seems like a waste if Penn is their top choice.

@Penn95 I think that you are over simplifying when you write that “Low income students will definitely get a great FA package from Penn.” If the “low income” is from an employee W2 reported earnings and the family also has low or no assets, you are probably correct. If, on the other hand, the “low income” is from self-employed or pass-through small business income and the family has business assets, the idea that they will “definitely get a great FA package from Penn” borders on the preposterous.

All other things being equal, for a student applying for FA with anything but the most simple low W2 earned income FA application, they are better off applying to an institution that offers EA as opposed to a peer institution that offers ED.

That is a known issue with almost every school’s NPC, not just Penn. Small businesses, rental property, trusts, and divorced parents all can result in NPCs giving results showing more aid than the student can really expect. But that is not just a Penn problem.

ED students at any school need to be mentally prepared to walk away if the finances don’t work. But realistically, few are prepared for that.

@tdy123 i guess I should have said low-income, low-asset families. Assets make things murkier for sure.

Still I don’t agree that people would be necessarily better off applying to a school with EA. instead of ED. If the FA award is unsatisfactory, and their appeal is not successful, then no one is stopping them from breaking the ED contract. They just need to take nothing for granted and keep up with their RD applications. They should be doing this anyway. If ED falls through because of FA, then they will carry on with their RD apps, in the same way they would have if they had been rejected/deferred ED.

ED offers a huge boost so I don’t see why people with Penn or any other ED school as their top choice wouldn’t use it.

I am new to this and my understanding has always been ED is really for people who don’t need to worry about college cost. Why ED will give someone a huge boost even if they might have to walk away from it if the FA is not sufficient? @Penn95 I would be devasted to tell my child that I could not let him/her go to her dream school, which s/he already been accepted because of we could not afforded. That seems should be one of the first questions we address when selecting schools to apply (ed or not). No?

You should only use ED if you and your child are fully prepared to walk away if the aid does not meet a number you previously agreed to, and if the NPC at least looks like the aid might meet that mark. Students should continue to work on their RD applications with the idea in mind that they might very well be attending one of those schools instead if the ED FA offer isn’t sufficient. No one should have a “dream school” anyway. They should have a list of schools they’d be willing to attend and a pre-determined set of financial criteria the FA offer has to meet. IF parent and child can approach it with that attitude, and the student has one school that they prefer but a list of remaining schools they would be fine with as well, then ED is fine.