The basic difference is that Early Decision (ED) is binding and Early Action (EA) is not. Binding means that if you are accepted, you agree to attend the college and withdraw or not apply to any other colleges. You can only apply to one college through early decision. The only way for students to get out of an early decision commitment is to show that even with their financial aid awards, they cannot afford to attend the college.
The main reason why students would choose early decision over early action or regular decision is because students have a better chance of being admitted under early decision. This is true especially of competitive schools.
At one time, the use of early decision was criticized since it meant that students who needed to know their financial aid award couldn’t apply early decision. Thus, early decision tended to benefit students from wealthier families while reducing the changes for admission for poorer students. Consequently, many schools dropped their early decision option. However, recently some universities have added the option back to their admission process.
Applying early action generally doesn’t have any admission benefits. However, often students must apply early action to receive consideration for all institutional scholarships and grants. Also, some colleges waive application fees for students who apply early action.
Why wouldn’t someone apply early action if she had the option? A student who needs her senior fall semester grades and activities to strengthen her application might wait to apply regular decision.