Once Again: Early-Decision
Disappointments.
In September, there was my post1 on the lawsuit alleging collusion between universities that have early-decision admissions; from what has been available, the same details are largely the same, but some more articles have been done.
Firstly, early-decision admissions is most definitely a way for universities to price-discriminate (and that is something fine with me). (Donations, similarly, are in the same spirit.)
Two things: (1) when applying early-decision, your chances increase dramatically; (2) you cannot compare other financial-aid offers once accepted because of the commitment needed.
For students attempting to differentiate themselves (and the universities wanting to sort through students), early-decision (and other alternative admissions practices contrary to regular-decision) does this very effectively.
There is an information problem, and early-decision solves it.
Northwestern introduced its early-decision program for the 2025-2026 transfer application cycle, soon after the University of Chicago implemented early-decision for transfer applicants as well; competition anyone?
And it seems to be pretty well-received among those who applied early-decision:
“Xinpeng Gao, a freshman studying computer science at Binghamton University hopes to transfer to NU this year. Gao said he intends to apply using the early decision pathway, especially given the presumed higher acceptance rate.
‘It would be a great fit for me, and I would like to maximize my odds,’ Gao said.”2
And more:
“Last year, Weinberg sophomore Tuhina Srivastava applied to the University of Chicago as an early decision transfer student from Northeastern University to get a competitive edge.
If NU also offered early decision transfer applicants, Srivastava said she likely would have applied to NU from that pathway instead.”
Again, commenting on an argument made in my last post on this: universities that do not innovate and become competitive in their admission practices will be at a disadvantage.
Adoption of early-decision among universities is not necessarily an outcome of collusion.
Many of the arguments against early-decision seemingly attempt to characterize early-decision as something overwhelmingly beneficial for only universities, and many do so in some of the most paternalistic ways possible.
“The plaintiffs claim this trade-off puts ‘price-sensitive’ applicants at a disadvantage because they are forced to make a decision without knowing the full cost of attending one school or the other, a comparison that is less crucial to wealthy students.”3
The argument should be thought of as strange, for a number of reasons.
More price-sensitive applicants should consider that trade-off in the first place. Somebody needing to get the minimum price possible should want to compare their different financial aid offers across institutions.
Notice the word “forced”.
And that should reflect something from the lawsuit itself:
“…students are strongly incentivized to participate in Early Decision, even if they might otherwise prefer to see what other colleges and universities would admit them and compare costs of attendance among schools to which they have been offered admission.”
Maybe universities are competing on other margins than just price.
Something funny to me from the lawsuit:4
“The conspiracy is also self-reinforcing. As one commentator noted, ‘Given the benefits that early decision programs provide for universities and the fear of being put at a competitive disadvantage, it is unlikely that many institutions will voluntarily discontinue offering ED while their peers continue to offer it.’ Schools that choose not to use Early Decision may lose out on applications from desirable students who wish to use Early Decision at a competing school, and the schools cannot earn the supra-competitive levels of revenue that result from being protected from competition by the Early Decision Conspiracy. Unwilling to subject themselves to these disadvantages, few schools have abandoned Early Decision programs after using them, notwithstanding the broad consensus that they are harmful and unfair.”
And:
“In essence, the competitor schools, who—under E[arly] A[ction] or regular decision—might have lured the student away with a better financial aid package, promise not to compete with the school to which the student has been admitted. The colleges have, through their agreement, created monopolies on certain customers’ business for themselves—an illegal customer allocation and horizontal restraint of trade. Just as it is illegal to act in combination with competitors to set different prices for different customers, it is also illegal for competitors to grant each other exclusive access to certain customers. Each school, by sending out a list that its competitors will enforce, is guaranteed a listed student’s attendance, and a student can only negotiate financial aid with the school that admitted him. In the remaining negotiations, the student has given up his leverage: He cannot make a credible threat to go elsewhere, because his name has already been removed from other schools’ applicant pools.”
Oh jeez. But to be more serious…
My fundamental problem with this lawsuit is that collusion simply seems improbable. For any successful collusion between universities, you would need to detect cheating, punish defectors, and ensure that information is not costly or transparent.
The information problem here between universities (although lessened between students) is made even larger: financial aid packages are pretty individualized, and universities cannot really easily observe what financial aid other schools are offering.
The more true detail: students accept before ever even getting a competitive offer; therefore, there is nothing to compare or monitor other than the early-decision agreement. Maybe that would be the more important focus, the agreement itself.
But still the problem in the argument is there. Even before the agreement, universities are competing intensely to attract students to apply early decision to their school specifically and students choose which school on a number of different factors.
The competition for the market is real (and something the lawsuit ignores), and schools can abandon or adopt early-decision quickly; any attempt to supposedly extract above competitive rents would be immediately undermined by other competitors.
Where is the punishment other than good ole competition?
Campus, & Wei, A. (2025, October 24). Northwestern introduces early decision transfer application. The Daily Northwestern. https://dailynorthwestern.com/2025/10/24/campus/northwestern-adds-early-decision-application-track-for-transfers-following-the-university-of-chicago/
Lawsuit accuses 32 Elite Colleges of Early Decision Admissions Conspiracy. (n.d.). https://www.forbes.com/sites/michaeltnietzel/2025/08/10/lawsuit-accuses-32-elite-colleges-of-early-decision-admissions-conspiracy/
CBS Interactive. (n.d.). Northwestern, UChicago named in lawsuit claiming university early decision agreements are anticompetitive. CBS News. https://www.cbsnews.com/chicago/news/northwestern-uchicago-lawsuit-university-early-decision-agreements/
Hi,
I'm one of the people you quoted from the NU Daily (after finding this article after looking up my own name on google out of curiosity). I don't think the argument of being a price-sensitive applicant is a tenable argument for me here because if admitted, according to the financial aid calculator I found online, I would pay less than what I current pay from my state school especially as a first generation college student. There's also an explicit clause in the early decision agreement that you can back out for financial reasons. Of course, I know this will probably be disadvantageous to me since I'm requesting aid but I cannot change my family's financial situation.