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4 overlooked ways to cut college costs

Interested in slashing the cost of going to college? Then consider ignoring the conventional wisdom about where to go to school and how much you must pay.

Here are four often overlooked ways that savvy parents and teens can reduce their college costs.

1. Consider schools off the coasts. If you ask smart, ambitious teenagers where they would like to attend college, they will often name prestigious universities in cities on the East or West coasts. After all, what teenager wouldn't like the idea of going to school in metropolitan areas like Boston, New York City, Los Angeles and the San Francisco Bay Area?

The trouble is that schools in these popular destinations can charge considerably more because of their desirable locations. In addition, many of these universities are more likely to offer mediocre financial aid.

For example, New York University is one of the most popular schools in the country, as well as one of the most expensive. Tuition and room/board at NYU last year was $62,936. The average merit award was a mere $3,692.

Let's contrast that with Drake University in Des Moines, Iowa. Tuition and room/board at Drake for the coming school year will cost significantly less than NYU at $43,292, and the average merit award of $14,213 drops the average price to $29,079 for those who don't qualify for financial aid.

2. Think twice about research universities. If you want to pay less for a bachelor's degree, don't limit your search to research universities.

Research universities can charge more and offer fewer merit scholarships -- if they offer any at all -- because of their strong brands. The Ivies, MIT, Georgetown and Stanford are among the institutions that fit into this category. The most highly ranked research universities typically offer excellent need-based financial aid, but since these institutions are mobbed with wealthy applicants they don't have to offer scholarships to high-income students to attend.

Families are more likely to get a discounted price if they shop around for colleges. Unlike research universities, colleges don't enjoy national name-recognition, which means they have to discount their prices. Colleges also tend to be far more focused on undergraduate education, while students who attend liberal arts colleges are more likely to go on to graduate school.

Here's an example of the price differences between these two types of institutions. At Harvard, 42 percent of freshmen pay full price, while at Grinnell College, an elite liberal arts college in Iowa, only 13 percent of students pay the full fare.

This pattern is visible nationwide. Roughly 39 percent of freshmen do not receive institutional scholarships or grants at research universities, according to the latest statistics from the National Association of College and University Business Officers. In contrast, roughly only 6 percent of freshmen attending college fail to receive scholarships and/or grants from their schools.

3. Use a net price calculator. Most teenagers apply to colleges and universities without having any idea if these schools will provide financial awards. Families often don't find out what they will be expected to pay, after financial aid and/or merit awards are deducted, until just weeks before a decision is due.

But people no longer have to apply in the dark thanks to federally mandated net price calculators. These tools provide a personalized estimate of what a particular school will really cost. When using a calculator, some families will discover that the cost of a $60,000 university will be $30,000, $20,000 or even lower. For others, the cost really will be $60,000.

After you enter financial information and, in some cases, provide details your child's academic profile, the calculator will estimate what your net price would be after subtracting any applicable scholarships and grants.

Each school offers its own net price calculator on its website. Unfortunately, roughly 50 percent of calculators use the federal template, which is flawed. The federally inspired calculators don't ask about a family's assets or a family's actual income. A bad calculator could take less than a minute to complete, while a good one could take 10 to 15 minutes or longer.

4. Appeal an award. Don't assume that the financial aid award your child receives is the final offer. You have the right to appeal for a better award. Conventional wisdom suggests that families can only appeal if their financial situation has changed since they filed their application, but that's not true.

Other than at elite schools, college is a buyer's market, so appeals for more need-based aid without a change in a family's financial circumstances can definitely be worthwhile. For affluent families that don't qualify for need-based aid, asking for better merit awards can also work.

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