Can ED accepted student back out if the College refuses financial aid?

I have a question around ED and wondering if others have faced this.
I started making 200K+ annually a couple of years ago and spouse is stay at home (income can change drastically if I lose my job or have to take a lower paying job)

I read the ED Contracts (Rice and Hopkins) and they say that I can reject an ED acceptance if the School is not able to provide Financial aid.
My daughter has a very good SAT score (1580). She has a weighted GPA of 5.56/6.00 (4.0 unweighted) and is currently 4th in a class of 550 students (top 1%) and has taken multiple AP Classes with mostly a 4 or 5 and has done a major global volunteering initiative (spent over 500 hours of her time).

I am counting on her getting a good scholarship or full ride at UTD or UTA, but she is also interested in Rice and some of the Ivies. I know for sure UTD will cover her entire Tuition.
When I enter my info thru the Financial aid calculators, it shows that my daughter will not get any aid at all, although honestly if I have to pay the full fees for 4 years, I will have $0 left in my savings account by the time she graduates and I have another kid coming up 4 years later.

I would love for her to go to Rice or one of the Ivies (assuming she gets in), if they are willing to give 50% aid and so wondering if she chooses say Rice for ED, then whether we would have the ability to back out if they don’t provide some kind of financial assistance.

Any info. in this area is appreciated.

If you have done the NPC’s (and FASFA forecaster to estimate your EFC) that is the amount that you can expect for financial aid. If the actual aid amount is significantly different you could theoretically back out of an ED agreement
but not just because you don’t like what they are offering.

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Do you have a price limit of what you are willing to pay? Have you told your daughter that price limit?

It is best to tell her before she applies anywhere. Letdowns after admission (particularly to a college that is a first choice enough for the student to apply ED) tend to be bigger letdowns than letdowns before applying anywhere.

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The ED Contract for Hopkins says the following:

Can someone explain what is the meaning in “Bold”? What is the meaning of sufficient? sufficient as per FAFSA which I feel is a little strenous?

I understand that I may apply only to one institution under a binding Early Decision program and that if admitted under the Early Decision Plan, I will attend that institution (only if sufficient financial aid is offered). I further understand that if admitted to my Early Decision institution, I may not apply to other colleges or universities and must immediately withdraw applications to other colleges and universities. I further understand that it is a violation of the Early Decision
Agreement for an applicant to be an Early Decision candidate at two or more institutions at the same time. The institution(s) I have applied to may discontinue
my application or withdraw my offer of admission at any time if these conditions are not met.

If the NPC shows you would pay full freight, Rice will not magically come up with 35K because you’re wishing and hoping they do. Need-based aid is granted based on need, not on what you want to pay. If financial situation changes later, you can discuss with the FA office at that time.

In theory, you can get out of ED for financial reasons, but colleges will also expect you to have done due diligence.

It would be unfair for your kid to waste all that time on an application knowing she could not attend. Not to mention wasting the university’s time. You are better off communicating to your kid how much you are willing to pay, and then come up with colleges that fit those financial parameters.

Given the expense of med school, full pay at Harvard, Penn, Rice may not be the way to go. UT, with Texas med schools, are a perfectly viable alternative, as are schools like Alabama or ASU with options for merit.

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If she gets into UPenn or Harvard or something like that and I have no option but to pay, then I guess I will pay, but would really prefer to not zero out my bank balance as she wishes to go the Pre-Med and Medical route and so I am looking at another 300K expense during Medical year + S2 following in another 4 years. In the next 8 years, I am looking at a spend of probably 1 Million USD and definitely trying to minimize that impact.

There is no magic financial aid money. If the NPCs say you will be full pay
believe them. You earn $200,000 a year in income. That is not an income level that goes with significant need based aid. You are not lower income.

As you have pointed out, your kid is a great candidate for merit aid at some schools. You might want to look at ASU, U of New Mexico, U of Alabama where your costs would be much less than the full cost of Rice.

Especially with medical school in the future, please don’t stretch yourself financially.

My opinion
(from experience)
medical school students can take out loans up to the cost of attendance. You can offer to help with medical school costs if you can. In addition, Texas has instate medical schools that would be cost effective and I believe they do give preference to TX residents @texaspg @WayOutWestMom can you speak to this?

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My understanding is that you should only apply ED if you are not dependent upon “merit” based scholarship. If you want to price shop for merit go RD.

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Great advice! Thank you! and yes, I don’t think myself as a Low income. My fear though is always around not knowing the future.unknown. Just because I make 200K now, there is no guarantee I will keep making those in the future + Jobs being sent overseas, there is always a chance I start making 100K in a year or two.
If that happens, will the colleges adjust future fees based on need?

I am very concerned about you spending all of your money on one of these schools and then having nothing left for your younger child. That’s a very bad plan.

I would sit down with your daughter and let her know what you can spend per year. She can add the small student loan. Then I would look for schools that give merit. In the unlikely event one of the NPC’s gives you an affordable number, you can add it. Schools will not give you half.

Lots of smart kids go this route.

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There are some top schools, like Vanderbilt, that have generous merit scholarships for top students. Your D could look into some of those schools, but it’s important that you let her know that attendance is dependent on her getting merit.

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I believe you can back out if there is not sufficient financial aid, but since your EFC shows no aid, that is irrelevant. You can’t back out because she didn’t get merit aid.

You do the FAFSA and for some schools the CSS Profile (sometimes IDOC). You can also explain special circumstances, either in the Profile or directly to a financial aid officer. I would not worry about future changes.

Harvard gives aid to those with incomes up to $180k and sometimes above. Did you do the NPC for Harvard? Just as an example not implying she is applying there.

Many of us did not do ED so we could evaluate the financial end of things with RD.

I believe his EFC is closer to full pay. A $0 EFC would garner significant need based aid at schools that meet full need for all.

To @parentofd22 you cannot predict the future. But you can make plans that you financially feel comfortable with. If you lose your job, perhaps your spouse could get a job. Some colleges will consider a special circumstances consideration and adjust aid if you lose income. Some won’t.

You know what your income shows you can pay for the next few years. EFC is based on prior prior year income
so for the 2021-2022 academic year that would be 2019 income. For 2022-2023 it would be 2020 income. For 2023-2024 it would be 2021 income. And so on.

You need to set a budget, and you need to convey that budget to your daughter. In my opinion, this should include that you have a second kiddo who also will need to go to college too.

Don’t uncomfortably overextend, and don’t let your kid guilt you into paying an amount that doesn’t align with your family finances.

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Can the student back out if there isn’t sufficient aid? Yes. The issue is if the NPC shows you don’t qualify for need-based aid, and the school doesn’t even offer merit aid, I’m not sure what grounds you really have to back out.

Not to mention the hurt feelings your D has if she earns an ED acceptance and you tell her that you are unwilling to pay the tuition that you knew you would be expected to. Colleges expect families to pay for costs out of past (savings), present (current earnings), and future (loans) income. You know what you have earmarked for college savings, what you are currently making, and how comfortable you are taking on debt. If the expected payments put you outside of your comfort zone, you need to address that before applications are submitted.

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ooops that is what I meant! Edited!

I don’t see any particular advantage in breaking the bank for undergrad if your daughter’s goal is medical school. Medical school adcomms really don’t care where an applicant attends undergrad.

Med school admission consists several rounds of “cuts”-- with GPA and MCAT score being the first and most important. While the “name” of the undergrad is not of zero importance, it’s very, very low on the list of items that med school admission officers consider when deciding who to invite for interviews or when making acceptance decisions. All other factors (GPA, MCAT, ECs, LORs, personal statements, secondary essays, interview performance, race/ethnicity, low SES family status, first gen/immigrant status, fluency in a foreign language, prior military service/Peace Corps, etc) are considered to be significantly more important than the name of the undergrad attended.

(See: p. 14 where a survey of medical school admission officers ranks the prestige of undergrad as having “low importance” https://www.aamc.org/media/18901/download)

You also need to be aware that many med schools (esp private medical schools, also some public med schools) require parental financial information and use that info to award need based FA, including federal student loans. (Your daughter will be assigned a family EFC for med school, just like she’[ll be assigned a family EFC for undergrad. She will be expected to pay the EFC first before any FA kicks in. Nationally the median COA for med school is $70-75K/year. Several are in the $110-125K/year range.) Med schools require parent financial info even if the student has graduated from college and/or is older than age 24. It’s required even if the student is married and/or has been self supporting for several years.

So expect to be on the hook to help pay for your D’s medical school too.

TX does give preference to state residents in public medical school admissions. IIRC, it’s mandated by statute that 90% of every class must be TX residents. Still the in-state admission rate for individual TX public med schools is low, under 10%.

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Sure you can ‘get out of ED’ if you can’t afford the school. No school can make you attend, make you write a check.

But what is the point of applying ED to a school you know you can’t afford? If that school offers merit aid, you could take the chance and apply, knowing she can only go if she gets that merit aid. Merit aid at top school is usually rare and competitive, if it exists at all.

Applying ED at a school you can’t afford and are unlikely to be awarded merit aid is just a waste of time and money.

Schools don’t award FA based on what COULD happen. Yes you could lose your job, could have a salary cut, could have a medical emergency. If that happens, most schools will re-examine your situation (and at most schools, you reapply for aid every year). They also don’t care, sadly, that you have another child who would like to go to college someday. FA is not always fair and you have to play the cards you are dealt.

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Also keep in mind that tuition and room and board increase every year (usually) - lucky if only 2.5% - but can go higher and it adds up.

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You need to make a financial plan that covers all of the following financial demands:

  • First kid’s undergraduate college costs.
  • Second kid’s undergraduate college costs.
  • Your retirement.
  • Contingency savings against job loss or income reduction.
  • Current cost of living.
  • Any contribution to medical or other professional school would be a bonus (or perhaps if a kid goes under budget on undergraduate, offer the under budget amount to professional school costs).

Otherwise, you may end up being in a situation of spending too much on one of the above (e.g. the first kid’s undergraduate college costs) and not having enough for the others.

Once you have made your financial plan, tell your kids what the price limit for their college costs will be.

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That’s similar to our current income, which was less when dd24 and ds23 were in college. Even with two in college, we were eligible for zero FA. They don’t care that we have 5 kids, or that smaller homes in our area start at $450.000, or that we have a 5 figure property tax bill, or a high deductible health insurance plan. My kids had lower stats than your child (but still decent) so they chose public universities. We would’ve liked FA, fortunately the kids chose majors that would help them find employment so they could pay off loans.

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