Options can ease college-aid panic

Crunching the numbers on college costs has been a particularly grim task for parents of freshmen this year.

The weak economy has strained their cash resources, and the mortgage crisis has made many unwilling or unable to tap home equity. On top of that, dozens of lenders have stopped issuing federally guaranteed loans because of the credit market turmoil.

"In terms of parents paying, there's more stress than I've ever seen," said Valerie Broughton, a Minneapolis-based educational consultant who says many are considering changing to less expensive colleges or universities than they had planned.

But even with the start of college just weeks away, money can be found for those who don't have all the financial aid they need. One reason is that schools, too, are under extra pressure and working harder to fill their freshman classes this year as students make late switches because of costs.

That can work to the advantage of those who have been accepted by their school of choice but are struggling to pay for it. Additional financial aid and scholarship money can be dangled at the 11th hour as earlier enrollment commitments evaporate, a phenomenon known as the "summer melt."

"The later in the year we get, the more valuable each student becomes and the harder they are to replace," said Lynn Nichelson, financial-aid director at Illinois Wesleyan University in Bloomington, Ill.

Experts recommend contacting a college's financial-aid office before ruling a school out because of money. Sometimes the aid outlook can improve from what was offered earlier, perhaps because of a change in the family's situation such as a divorce or one parent's loss of a job.

Evidence suggests schools are more willing to help out with aid than in the past. Broughton, previously an administrator for several universities, said colleges are dipping into their waiting lists as a consequence of the trend away from early-decision programs, which has resulted in a late scramble for students.

One "must" for those who haven't done so is to submit the Free Application for Federal Student Aid form. FAFSA is required for eligibility for student-aid programs such as Stafford and Plus loans and is used by most states and many private colleges to determine financial aid.

Searching for last-minute scholarships and loans at online sites such as FastWeb.com and Finaid.com can be fruitful. But parents are advised by experts to consider noneducation-based loans as a last resort because of extra costs and the need to start paying them back immediately. "Don't go ... to a bank that will try to give you a loan at higher rates," said Nichelson. "The student can really get bogged down financially."

If financial attempts fall short, students and parents may want to consider a less expensive option from a state university to a community college, or even waiting a year or two to save more money.

Lester Lefton, president of Kent State University and a psychologist, strongly advocates doing whatever it takes to get a college education and a degree from the highest-quality institution affordable. But he said people have to think realistically about the debt load and the time it will take to pay it.

Parents and students alike should think of it as a 10-year commitment," he said.