Early Decision (ED) is under a bit of legal peril but it will be around for a while anyway. ED allows students to apply Early (it's in the name) and get a Decision (!) well before the Regular Decision (RD) deadlines. The expectation is that students accepted under ED will commit to attending said university well before Christmas. This aids universities in filling dorms in a very predicable manner and hence bumping up their yield percentages. Yield is the percent of accepted students that actually attend the school and is a core component in most rankings. The policy also lets families complete the entire application process before the end of the calendar year and not apply to 18 other universities.
Sounds great for all concerned, doesn't it? Nope.
Students seldom pay the full sticker price for university and the price of the product is a core consideration in choosing the university for students in the RD cycle. A student might get into 5 schools and the family would then have some degree of bargaining power to extract the best "package" from the university. This would help inform the monumental decision of which school to pack off to for four years. Students committed to ED do not have such privilege as they are expected to attend the ED school if accepted. This makes the policy clearly biased towards the very wealthy for whom cost isn't really a concern (and who can afford expensive test prep). University rankings probably take a bit of a hit through marginally inflated admit rates, but the financial imperative of getting bums in seats early and in a predictable way more than outweighs that minor concern. Yield percentages have become a bit unpredictable (see below) so getting students "double-confirmed" is a great idea for schools.
An ED arms race of sorts has emerged with many competitive universities leaning very heavily on the policy to fill over half of their entering class. The admit rate for ED applicants is often over triple the RD rate so if a student really has university A as a first choice, it would be folly not to apply ED. Unless, the family doesn't have the financial means to potentially pay full fare.
We think the policy should be banned as it is clearly discriminatory in a larger system that is rife with similar barriers to entry for the non-plutocratic majority. Not all schools have ED and many have a dizzying, shifting array of non-restrictive Early Action (EA), EA II, RD, REA, etc. that you need to read about carefully on the school websites. As always, check your in-school university advisor to understand everything as best you can. They are the ones that have the unenviable task of keeping up with all this.
All we can do here is share some data we have compiled.
