NEW YORK (CNNMoney.com) -
Early college applicants may gain an edge during admissions, but their financial aid options can get hurt in the process.
Many schools offer either an early decision or early action admissions option. Both plans allow students to apply early, usually in November, and get an admission decision from their college of choice in December or January -- well ahead of regular admissions decisions which mostly arrive in April.
But since early decision plans are "binding," which means student must agree to attend the school if they are accepted, the best financial aid packages may not go to them.
"Schools will tell you they treat everyone the same, but I suspect that on occasion there are some regular decision applicants who might get a 'sweeter package'", especially if they have special talents and are a hot prospect, said Deborah Schmidt of AdmissionsConsultants.
If your child has been accepted to college early decision, they do have the option to back out of the binding agreement if they aren't offered an adequate financial aid package. But first parents need to figure out exactly what "adequate" means.
Evaluating your aid package
The first step for early applicants is to evaluate the projected aid package they receive with their admission offer to see if it meets their full needs.
Students accepted under early action plans don't have to commit to the school accepting them, so they have the option of weighing financial aid packages from competing colleges. But evaluating the aid award can be tricky for early decision students because they don't have other packages with which to compare.
"You have a consumer decision to make, but you don't have a frame of reference to work with," said Carl Buck, vice president of funding solutions at Thomson Peterson's.
Colleges look at each applicant's financial situation and calculate an "expected family contribution." They then try to make up the difference between the EFC and what it costs to attend that school for a year with aid in the form of grants, scholarships, loans and work-study awards.
Parents will want to consider the composition of the financial aid award, such as the ratio of grants to loans, and make sure it's something they can handle, Schmidt said.
Loans help alleviate the immediate pain of large tuition bills, but they weigh students with debt once they graduate. Grants, on the other hand, don't have to be paid back.
While early decision students don't have the option of comparing offers from other schools, they can still estimate how much aid someone with their financial situation can expect from competing schools, said Sandy Baum, senior policy analyst at the College Board. Several schools offer online calculators that generate estimated aid packages for students depending on their specific details.
Getting a better deal
If the aid award is considered adequate, then students are ready to move forward and attend their top choice college. But when the package doesn't meet expectations, there are still options available.
- Call the financial aid office of the college offering the award, Buck suggested. Schools don't always do the best job explaining the financial aid award, so it's important for parents to communicate where the aid award isn't meeting full need.
- Packages can be revised if a student misestimates his or her situation or if there are changes to their financial circumstances, such as if a parent loses a job. The projected aid awards offered to early decision students are based on estimated 2005 income, Baum said. Students need to submit their final financial information for 2005 when the Free Application for Federal Student Aid, or FAFSA -- a government form that students must fill out for federal aid -- is made available on Jan. 1.
- If the award doesn't meet full need, students can back out of the binding agreement -- and it won't work against them. They can reapply under regular decision and hope for a better financial aid package as well as apply to other schools. This is really a last resort, though, and in keeping with the ethics of the admissions process, students should only choose this option when the package truly doesn't meet their needs, Schmidt said.
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