Is it true that applying ED is a big mistake if you need financial aid?
<p>probably so</p>
<p>The issue comes down to the makeup of the financial aid package that the ED college offers you. Basically you are giving up the option of comparing financial aid packages from different schools by applying ED. </p>
<p>The colleges try to meet your financial need. Each college has a COA (Cost of Attendance) that includes tuition, room and board, books, and misc expenses. Your parents fill out the FAFSA which is a federal form listing their income, their savings, your income and your savings. Some colleges may also require that the College Board PROFILE also be filled out. Based upon this information, your EFC (Estimated Family Contribution) is calculated. This is the amount that the college expects you or your family to pay towards your education. Your NEED is the COA minus the EFC.</p>
<p>The college's financial aid office then tries to put together a package to satisfy your NEED using grants, loans and part-time work. Grants are free money. Loans have to be paid back.</p>
<p>The reason that ED is a bad idea if you are also going to apply for financial aid is the grant/loan ratio. One college may give you a $20K grant and a $5K loan. Another college may give you a $10K grant and a $15K loan. Both of the packages add up to $25K, but the first college's offer is better since you only have to pay back $5K per year while you would have to pay back $15K per year at the second college. By applying ED, you are giving up the option of comparing packages. You have to take whatever they give you. Financial aid packages vary widely between colleges, and between different students at the same college. </p>
<p>A typical COA at a private school is $40K per year. I should warn you that the above may sound better than it is. The problem is that the EFC can be very high for some people who consider themselves middle class. A family with a combined income of $70K per year (both parents) might have an EFC of about $15K which is a whole lot to pay each year. However, as the combined income goes towards $100K per year and exceeds it, the EFC gets very high.</p>
<p>To add on to what Dufus wrote:</p>
<p>Some schools only use the federal methodology to calculate financial aid (the fafsa said you made "X" amount of $ your EFC is Y- no ifs ands or buts) Some school use the combination of both institutional methodology and Federal Methodology (federal in terms of being eligible for pell grants & stafford loans) They will ask for a CSS profile or their own financial aid supplement. Schools using a combination of both may end up giving you a lower EFC than a school using the FAFSA alone. The CSS profile looks at how your money was spent, it takesinto consideration your age, kids in private school and how much you pay. It also protects a portion of your parents income based on their age.</p>
<p>If you attend a school that is not need blind (need aware, need sensitive) needing aid is not going to help your cause because schools know that many students who apply ED will not need aid (they will have a nice portion of full paid students who have committed and they don't have to worry about negotiating aid).</p>
<p>Apply ED to BU could be tricky because they state in their aid package that they have need based merit aid. So if you need aid , you must be at the top of the application pool to get the big bucks. </p>
<p>There is only a handful of schools that are both need blind and meet 100% of your demonstrated need. These schools tend to be very selective. At worse if you were to max out on all of the first year loans available to you, it would be $2625 Subsidized stafford, $4000 perkins and $4000 unsubsidized stafford ($10,625 this could happen if you have an EFC of 0 or 30,000 if you attend a school that the COA is $40,000) you just don't know what you are going to get, but the school would have still met your demonstrated need. </p>
<p>Depending on the school, the person with the "0" efc may have gotten a package with no loans, from another school which s/he could have used to negotiate a better package.</p>
<p>An overwhelming number of the country's 3000 colleges gap (they do not meet 100% of your demonstrated need (the cap could literally be in the $10,000's) you have no way of knowing until you get the package and no recourse other than attending your local shool.</p>
<p>There are many components that go into calculating financial aid. If you are house rich, it could mean a big difference in the EFC you get from a school. Some schools calculate home equity at 5%, others may calculate at 2 %. If you have 500,000 worth of equity in your home your EFC could be anywhere from $10,000 to $25,000. YThis does not even take into consideration your parents salary, money in the bank, 401k deductions or assets in your name (college funds, savings bonds etc).</p>
<p>Thanks for the informative replies. I was going to apply to Wesleyan University in CT early decision, which is need blind, but I guess it's probably not a good idea.</p>
<p>mcghee, Applying ED when you need financial aid is not necessarily a mistake, but it is a risk. The decision to ED or not to ED, depends on your family's tolerance for financial risk. Since Wesleyan is both needblind and promises to meet admits' demonstrated need, it is reasonable to assume that they will offer you a reasonable package. The risk is that you have to take it whatever it is and can't compare other offers.</p>
<p>If you apply RD to Wesleyan and several colleges you have the option of comparing packages, which can vary up to $10,000 in total (maybe more) and also in makeup between grants,loans, workstudy proportion. That way if college B makes a better offer you could go back to Wesleyan and ask them to reconsider, which often happens. </p>
<p>For some families a $10,000 difference would make a huge difference; for some it would be unpleasant but still absorb-able. The point here is that you really don't know: in the end Wesleyan may give you the best finaid package. They don't necessarily shortchange their ED applicants. The only difference is that you can't compare and negotiate.</p>
<p>So, the decision really depends on how much your family needs -- or wants -- the aid. You won't get nothing from Wesleyan if you apply ED, but you'll have no way to know what better offers you may have received from other colleges. </p>
<p>My advice would be for your parents to contact the financial aid office at Wesleyan and discuss this dilemma openly. LACs like Wesleyan (and AWS) really want kids to apply ED. It helps them and it helps the student. It's a win-win situation. If what's standing between you and an ED application is the unknown financial aid package, then you should try to address this with Wesleyan directly. They most likely will not give you an exact figure, but they should be able to give you a ballpark so that your family can calculate whether the financial risk is workable.</p>
<p>The Wesleyan website has a lot of financial aid information including this calculator. </p>
<p>At this point you should be neither overly optimistic nor overly pessimistic. Keep researching.</p>