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4 ways to cut college costs

(MoneyWatch) College costs continue to rise as the latest annual college pricing reportfrom the College Board recently reminded us yet again.

There are ways, however, that smart families can increase their odds of shrinking their college costs. Here are four tuition-shrinking strategies:

1. Use net price calculators
If cost is an issue, parents shouldn't let their teenagers apply to a college unless they have used the institution's net price calculator. These calculators, which are mandated by the federal government, provide a family with a personal estimate of what a school will cost them. By using the calculator, a family can form a good idea of a school's cost before a child applies and can therefore avoid the most expensive schools.

Tip: Some net price calculators are more likely to generate faulty answers. Calculators that only ask a handful of questions will often be less reliable.

2. Check four-year grad rates
A great way to limit college costs is for a child to graduate on time. Many families assume that their children will earn a diploma in four years, but that usually doesn't happen. Only 31.3 percent of students attending public schools graduate in four years, while just 52.4 percent of students in private institutions do.

Tip: You can find four-year grad rates at College Results Online and at the College Completion microsite at The Chronicle of Higher Education.

3. Determine your expected family contribution
Your expected family contribution is a dollar figure that indicates what you would be expected to pay, at a minimum, for one year of college. This dollar figure, which is based on a federal formula, often won't reflect what you can afford, but you can blame that on Congress, which is responsible for the methodology. If your family has a high EFC, apply to schools that offer merit scholarships to rich students. If your EFC is lower, look for schools that give excellent need-based aid.

Tip: Use the EFC calculator on the College Board website long before your child is a high school senior.

4. Borrow responsibly
When calculating college costs, don't forget to factor in potential loan expenses. Aim for schools where your child will only have to borrow through federal Stafford Loans to attend college. Here is the maximum amount that students can borrow:

  • Freshman -- $5,500
  • Sophomores -- $6,500
  • Junior -- $7,500
  • Senior -- $7,500

Tip: If your child graduates without a job or is underemployed, he or she could qualify for the federal Income Based Repayment Program, which allows students to essentially repay their federal loans based on what they can afford rather than what they owe.

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