FRANEK: Paying for college in a recession

COMMENTARY:

One thing you can say about our economic downturn is that when it comes to destroying dreams, it’s an equal-opportunity provider. Indeed, all strata of society have been challenged by the financial crisis, including parents who have lost their jobs and savings and are scrambling for new money to pay for their children’s college education.

Though more students applied to college this year than ever, more students also applied for financial aid. Nationally, 1.4 million students filled out the Free Application for Federal Student Aid (the most important financial aid application) in calendar 2008 versus 2007 - a 10.4 percent increase, the U.S. Department of Education reports.

When you combine competition for admissions and financial aid with the increasing costs of higher education (an average $25,000 per year for private schools and $7,000 for in-state public institutions), it can be profoundly unsettling.

While there is some good news - including a report from the College Board that more than $143 billion in financial aid is available - there are some important things students and their parents must consider if they’re serious about accessing these funds:

(1) Grades and test scores matter more than ever. The better the grades and test scores, the more college options students will have in earning meaningful scholarships and admission to low-cost schools. Consequently, the first thing students need to do is spend extra time studying to bring up their grade-point averages.

(2) Improve your college entrance test scores. The easiest thing to change is your SAT or ACT score. In fact, the time and resources you invest in preparing for the SAT or ACT can translate into tens of thousands of dollars in college tuition savings.

Interestingly, some colleges use a mathematical index that assigns points to test scores and grades and then combines them to come up with a number. Because that number is sensitive to test scores, an additional 10, 20, or 30 points on your college entrance exams could put you in a different category in terms of eligibility for financial aid, grants and scholarships.

(3) Take advantage of free resources to find colleges and improve test scores. A number of resources are available to help improve test scores. For example, the Princeton Review (www.princetonreview.com)offers practice SAT and ACT tests nationwide that provide high school sophomores and juniors the opportunity to jump-start their preparation for the college entrance exams.

These free practice tests save families the nearly $50 cost of taking the SAT or ACT and, more important, give students an understanding of how much stamina and focus are required for a nearly four-hour test.

Another value of these practice exams is the free score analysis. In addition to helping students identify their strengths and weaknesses, the analysis shows success rates in terms of guessing answers and provides strategies that can be used to eliminate wrong answers. For students who are inclined to procrastinate, the practice tests also jump-start their college admissions efforts.

(4) Students should apply to both affordable state schools and private universities that can offer generous financial aid.

Don’t eliminate a school because of its sticker price. Some of the most expensive schools give out huge scholarships and can actually be cheaper in the long run than public schools. Students from low- and middle-income families also can focus on schools that award aid based on family income. For example, schools such as Harvard, Stanford and Princeton universities and Swarthmore College meet the full financial need of students whose family income is below a certain level.

Students who fear that their family earns too much for need-based aid can also check out institutions that hand out lots of merit aid, which is awarded regardless of a family’s income. Also, ask about Pell grants and others that don’t have to be repaid as well as Perkins loans for lower-income students.

A good source - bestvaluecolleges.usatoday.com - can help you find public and private universities that may best fit your financial situation.

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