9 Ways to Help You Get More Financial Aid

The average total cost to attend a private, four-year institution — including tuition, fees, room and board — has increased 30% over the past five years, to $32,307 for the 2007-08 academic year, according to the College Board's Annual Trends in College Pricing report. At four-year public colleges and universities, costs are 40% higher, averaging a current $13,589. While the amount of financial aid has also risen, it's done so at a comparatively sluggish pace of 11%. During the 2006-07 academic year, the average package of loans and grants for undergraduates was $9,499.

To help close the gap between rising tuition costs and the amount of aid being offered, more than 40 colleges and universities — many of them endowment-rich Ivy League institutions — recently announced overhauls to their financial-aid programs. Harvard University was the first to move, announcing in December that it would cap the expected family contribution toward tuition at 10% for households making $180,000 or less. Other colleges soon followed suit. Dartmouth eliminated tuition for families making $75,000 or less and Stanford University is doing the same for families earning less than $100,000. Meanwhile, Northwestern University says that once a student has hit the four-year cap of $20,000 in student loans, it will cover the cost to attend with grants and work-study opportunities.

But these seemingly favorable moves also carry some unfavorable consequences. "Many students will opt to go to the school that offers the biggest strategic discount," points out Jack Maguire, founder of Maguire Associates, a higher education consulting firm. That means even the smallest school has to offer more grant money in order to remain competitive. If the college's endowment isn't big enough to live up to the task, the added costs could result in even bigger tuition increases.

For now, though, that competitive spirit could be consumers' key to a more-affordable higher education experience. Here's how to angle for a better deal.

To get a more-realistic sense of how affordable that college experience will be, subtract the grants offered from the total cost to attend. Make sure not to include any student loans in this calculation — even though a loan is considered aid, it's still a debt you'll have to pay later. For more tips on assessing the paperwork, read our column Comparing Financial Aid Offers.