"People in the middle class live pretty much paycheck to paycheck," says Matthew Breen, 19. "They can't come up with $35,000 a year. That's absurd."
Then, in March, Matthew and Ryan started getting thick letters - and their first lesson in college economics. While some of the schools patched together enough grants so that they could just cover their costs, others gave the Breens little option but to take out big loans.
"It was really unnerving," Matthew says. "Your financial situation doesn't necessarily dictate how much aid you'll get."
Never has the gap between the simplistic assumptions of applicants and the cutthroat reality of college financial aid been so wide. A report issued late last week documented just how typical the Breens' situation is. The National Center for Public Policy and Higher Education said 43 of the 50 states deserved F's in college affordability for sticking families with higher tuition and making degrees less affordable. Of course, many government officials, school administrators, and educational lenders do try their best to help students afford college. Some elite colleges, for example, are becoming more generous, ensuring that the top students will get enough aid to pay their tuition. And a growing number of states and towns are funding full-tuition scholarships at community or state colleges for good students.
Unfortunately, however, more and more schools are adopting secret and sophisticated aid strategies that often end up increasing families' out-of-pocket college costs. Meanwhile, the rules governing student loans and educational savings plans have changed so dramatically recently that those who fail to adapt will end up paying more than they should have to.
But a U.S. News analysis of hundreds of 2006 financial aid award letters, as well as interviews with researchers, college aid officers, lenders, financial planners, and students, reveals strategies that can help make a college degree more affordable.
The most important new strategies are those that yield "free money"-grants and scholarships. Most colleges tell families that the size of a financial aid award depends upon the student's ability to pay and academic performance. That's strictly true only for two kinds of schools: elite private colleges and popular public universities. Well-endowed, top-ranked schools like Princeton simply pick among the world's best students, then provide enough grants to cover anything the students really can't afford. And cash-strapped, application-flooded public colleges such as the University of Massachusetts-Amherst spread around what little scholarship money they have according to fairly simple need, merit, and athletic criteria.
But for thousands of lower-ranked schools scrambling for smarter kids, more generous donors, and increased tuition revenue, aid decisions are far more complicated-and secretive. "Most people would be shocked to learn how much goes into scholarship" decisions, says James Nondorf, vice president for enrollment at Rensselaer Polytechnic Institute.