For high school seniors, the early decision game has always represented a calculated risk. Apply early, and you might increase your odds of getting in. But if you apply to any school other than your top choice and are accepted, then you ve locked yourself out of your dream school.

For students applying for financial aid, the stakes are higher. Because of the timing of aid decisions, students who apply under early decision programs and are accepted could have a better shot at scoring more financial aid.

Not all sources of funding are affected, but in many cases, there is a real financial advantage to picking a school early and sticking with it.

Here s how financial aid works. On Jan. 1, families can begin filing their Free Application for Federal Student Financial Aid (FAFSA) for the next school year. That form determines a student s eligibility for federal financial aid, including Stafford loans, work-study programs and Pell grants all of which are available to qualifying students regardless of when they apply. For most families, this is the first step.

However, many aid packages like state and college grants are finite and often are doled out on a first-come, first-served basis, says Haley Chitty, a spokesman for the National Association of Student Financial Aid Administrators, which represents university financial aid officers. And many college scholarships have deadlines as early as December.

Depending on the university, students who are admitted during early admission could see some financial aid perks. The early decision kids have the first crack at the money, says Kalman Chany, the president of New York-based Campus Consultants, which advises college students and their families on financial aid. Those students are often courted by colleges into applying early because of their extraordinary grades or athletic skills, and they can end up with sizable financial aid packages.

There are also drawbacks. When students apply early decision, they re essentially telling the university that it s their first choice, so the university can more confidently try to pinpoint the smallest amount of financial aid it will take for the student to attend, says Chany. Also, students can t compare financial aid packages from several schools because they can apply to only one college under the early decision program.

Whether applying early or along with everyone else, students and their parents should start preparing their case for financial aid before next year. Here are five tips to maximize your financial aid package by keeping time on your side.

Prepare estimates and be ready to follow up

Because it s too soon to present 2009 tax returns or to file the FAFSA, students who apply early decision often have to fill out a separate financial aid form provided by the university and the College Scholarship Service (CSS) through a service called Profile.

The online form requires applicants to report an estimate of household income, their parents employment status and whether their parents own their home or rent. To submit a CSS Profile, students pay $25 for one college and $16 for each additional school.

Students who are accepted will receive a preliminary financial aid package with a rough estimate of what they ll get. In the spring, they ll have to file the FAFSA, and if the income or assets reported there are higher than the numbers included in the CSS application, they ll receive less aid from the university.

When trying to determine whether to apply for financial aid during the early decision period or wait until later, students should consider how their parents get paid.

Students whose parents receive a salary will have a better shot at receiving a preliminary financial aid package that reflects their needs in part because their paperwork tends to be straightforward. But when parents derive income from self employment, a small business, rental properties or limited partnerships, their children are better off waiting for the FAFSA to request financial aid.

The FAFSA is designed to take into account a family s broader financial situation and limit the chance that they ll be underfunded or that their preliminary aid package will change.

Apply early for state and college financial aid

Whether they re applying early decision or not, all college-bound high school seniors should start trying to get state and college aid now.

There s a set amount of money, so for someone who is applying to college, it s a good time to start thinking about financial aid, Chitty says. Students should contact the universities financial aid offices to find out their specific deadlines.

For example, students who apply to Ohio State University have until Dec. 1 to submit their admissions application to be considered for the university s most generous scholarships, says Diane Stemper, the director of financial aid at the university. The top scholarship for in-state students covers the total cost of attendance and room and board for four years, assuming the student maintains at least a 3.0 grade point average. Out-of-state students can qualify for a scholarship of $7,200 per year. After that, the university has a Feb. 15 deadline for its other scholarships and financial aid packages.

Highlight loss of income

With the unemployment rate now above 10%, many students parents have probably lost their jobs during the past year.

When preparing their paperwork, students should document any sudden change in household income that occurred in 2009 like unemployment, suspension of an annual bonus or a reduction of benefits.

In some cases, schools won t adjust a financial aid package until they see the tax returns showing the reduction of income, and they ll provide the additional financial aid retroactively, Chany says.

Appeal or reject the offer

When a financial aid package doesn t meet a student s needs, they can appeal to the college s financial aid office. At that point, financial aid officers will delve deeper into the family s finances, so applicants should be prepared to present paperwork to support their claims.

Students who applied early can appeal their financial aid offers, but those appeals create complications. The student s high school is not permitted to send his or her transcripts to other colleges when an early decision offer is on the table. In addition, students often receive their preliminary financial aid offers before colleges close for the holiday break but must wait until the schools reopen to appeal.

Ultimately, a student can reject an early decision offer on the grounds that the financial aid package isn t large enough to cover their needs, Chany says. After that, they can t reapply during the regular admissions period.