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Top 5 Things to Know About Financial Aid

fin aid top 5It's understandable if financial aid is not your favorite topic of discussion these days. But believe it or not, there are some bright spots in an otherwise bleak economic climate. Keep these five facts in mind so you can keep your head up as you navigate the college financial aid process.

1. The FAFSA: It's Better Than Ever
The notorious Free Application for Federal Student Aid (FAFSA) is now shorter, simpler, and a little more user-friendly than before. The 2010-2011 FAFSA features 22 fewer questions and 17 fewer screens, and it's better organized into categories such as "student demographics," "parent demographics," "basic eligibility" and "dependency status." After completing the online financial aid form, you receive instant estimates of Pell Grant and student loan eligibility as well as detailed information (like tuition and graduation rates) on schools of interest. And after June 2010, some of your income tax data can be imported directly from the IRS as opposed to being entered manually.

2. Out-of-State Surcharge:  You Could Get a Fee Waiver
The average surcharge for full-time out-of-state students at public, four-year institutions is $11,528, reports the College Board. While that may seem like a good argument for staying close to home, keep in mind that many states have reciprocity agreements with neighboring states that allow students to pay less than the published prices. Check with individual schools to find out if you can score a tuition break.

3. Institutional Grant Aid: Colleges Want to Woo You
Colleges don't want to lose your business, and they're willing to pony up the dough to make higher education more affordable. According to a 2009 survey conducted by the National Association for College Admission Counseling, 53 percent of colleges are now offering larger institutional grant aid packages and 52 percent are offering institutional grant aid to a greater number of students. Private colleges are more likely than public colleges to offer larger grant aid packages (60 percent vs. 37 percent) and smaller colleges are also more likely to award increased grant aid.

4. Federal Grant Aid: Uncle Sam Is On Your Side
Thanks to the economic stimulus package, the maximum Pell Grant award was increased to $5,350 for 2009-2010 and $5,550 for 2010-2011. The amount of your Pell Grant depends on your cost of attendance, expected family contribution (how much your family can pay) enrollment status (full or part time), and whether you attend for a full academic year or less.

5. Sticker Price: What You See Is Not What You Get
According to the College Board, the average cost of college tuition for 2009-2010 was $26,273 at private four-year colleges, $7,020 at public four-year colleges, and $2,544 at public, two-year colleges. But two-thirds of all full-time undergraduate students receive grant aid - institutional and federal. In 2009-2010, estimated financial aid in the form of grants and tax benefits averaged about $14,400 per student at private four-year colleges, $5,400 at public four-year colleges, and $3,000 per student at public two-year colleges. That brings the average net tuition and fees down to $11,900 at private four-year colleges and $1,600 at public four-year colleges. The average financial aid at two-year colleges covers tuition and fees and even provides about $500 toward living expenses.

What a pleasant surprise - the financial aid landscape might be favorable after all.