College Aid Packages Not Absolute

For students who are worried about paying for college during these tough economic times, there is hope. Kelli Grant, Sr. Consumer Reporter for SmartMoney.com, has some tips for cutting tuition costs.

When you first receive your college financial aid packages in the mail, don't assume that the school that offers you the most money is the best option. "One of the mistakes that college bound students - and their parents - make is [to think] the school offering the most aid is going to be the most affordable," says Grant. "You want to keep in mind those out-of-pocket costs and really dig into the numbers of that financial aid offer."

Your best bet is to crunch the numbers. Remember that college costs aren't limited to tuition, room and board. "If you factor in costs like meal plans, books and even transportation, that can add thousands to your tab and it can make some offers that don't include that seem a lot less generous," says Grant.

You can also look for grants and loans to finance a college education. Grants, like scholarships, are money that is awarded to you - you don't have to pay them back. Loans, however, can vary greatly in interest rates and lender terms, so do your homework before signing on the dotted line. Talk to the school's financial aid office and figure out what your payments will be once you graduate. Keep in mind that once you find a job, your starting salary probably won't be very high. A large loan payment could hinder your ability to pay other bills, especially in this tough economy.

There are two different types of college loans: private loans and federally funded loans. Grant advises staying away from private loans at all costs. "Those are high rates, often variable rates... When you're looking at aid offers, really just knock out the private student loans and compare federal grants," says Grant.

If you're still short on cash after loans, grants and scholarships, consider calling your school of choice and asking for more money. "You can actually negotiate it, which is something that a lot of parents don't realize," says Grant. "[There are] plenty of students who don't accept offers - they'll have some money freed up from that."

Also, if your financial situation has changed since you submitted your Free Application for Federal Student Aid (FAFSA) forms, the school may be willing to work with you to give you a better financial aid package. If someone in your family has been laid off and the financial strain is hampering your college plans, contact the school's financial aid office. "There's more money out there around this time of year if you know to ask," says Grant.

For more information on paying for college, as well as additional personal financial advice, click here to visit www.SmartMoney.com.
By Erin Petrun