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The Financial Aid Debate

The best things in life are free -- or so the saying goes. But the one thing believed to provide you with the best four years of your life -- college -- is about as far from free as you can get. Given that full rides are few and far between, how can you make sure you're getting the most out of your money?

Apples and Oranges?
The key, say experts, lies in thoroughly examining financial aid offers from your top-choice schools. "When comparing cost, make sure you are comparing the same sets of cost, otherwise you're not getting the full picture," says David Gelinas, director of financial aid at The University of the South: Sewanee (Sewanee, TN), and national chairman of the board of directors for the National Association of Student Aid Administration.

Gelinas recommends paying attention to five specific areas: tuition and fees, room and board, books and supplies, transportation, and personal expenses. After breaking down the cost for each school, Gelinas says to look at how much assistance toward that cost you are being offered. "The usual financial aid package includes grants, scholarships, loans, and work study, or the school's own work program," he says. Deduct the amount of assistance from the school's total cost, and what's left is your out-of-pocket cost.

Beyond Sticker Price
Of course, it's not as simple as who's offering you more aid. You have to look beyond the final price and at where your aid is coming from. "Look at the packages and see which is offering you more free money," says Ermelinda Carvajal, senior program manager from the Sallie Mae Fund.

Consider this: Harvard offers you $14,000 in assistance whereas Stanford only hands out $12,000. Harvard seems the obvious choice, but upon closer examination, you see Harvard provides $8,000 in loans and $6,000 in grants and scholarships, while Stanford is doling out $9,000 in free money and only $3,000 in loans. Hence, Stanford's $9,000 in grants and scholarships is more preferable than Harvard's $6,000, because ultimately, it means less money that needs to be paid back. "The loan debt you have will be less," Carvajal adds.

This is where reality sets in for most students. You have to ask, "How do I feel about being asked to work for or borrow some of my aid?" says Gelinas.

Tactics With Tact
Something else to consider is negotiating a financial aid package. Here, the experts are divided. "A lot of colleges don't like it," Carvajal says. "For some schools, if you do it, it puts a bad taste in their mouths."

Michael Burke, manager of school services with American Education Services in Philadelphia, however, begs to differ. He recommends talking to a school's financial aid office to see if there's anything else it can offer you. "If you really want to go to this school, walk into the financial aid office and say, 'I want to review and understand this package.'" By meeting with a financial officer to rework different factors like say, switching from a single to a double room, you may find additional ways to bring down the cost of your college education. "There's a difference between negotiating and being an informed consumer," Burke says.

Is Cost the Only Conclusion?

So that's it, right? Choose the school with the best financial aid package? Not quite. "Cost is important, but it shouldn't be the only thing you look at," says Burke. In addition to considering cost, "visit the school, take a virtual tour, hear comments from current students, and look at the support and social services it provides," he continues. "Otherwise, you'll wind up being disappointed, and transferring can be [more] costly."

Additionally, Gelinas advises against accepting a so-so financial aid package because of occupational incentives after graduation, like the Teacher Loan Forgiveness program, which erases a portion of your loans after you teach in an underprivileged school district for three years. "You may think you're going to become a school teacher," Gelinas says, "but what happens if you change your mind?"

Ultimately, Gelinas says it comes down to making a decision based on comfort, not cost. "I do worry about the student who makes an enrollment decision based on dollars and cents," he says. "It may be cheaper, but will you wind up paying a psychological cost?"