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Thinking merit money is all about grades and SATs
If you assume your child's good grades guarantee a merit scholarship at a safety school, you may be in for an unpleasant surprise.

Colleges can figure out when top-flight students are using them as safety schools; these kids' grades and SAT scores will be significantly better than those of the average student who enrolls. With less scholarship aid available at most places, some midtier schools are less willing to offer high-performing students merit money if they think it's unlikely they'll enroll, says Alex Bickford, senior manager of college finance at College Coach and a former financial-aid officer at Southern New Hampshire University.

So, if students want the college to try to lure them with merit money, they should visit the campus and show a genuine interest by contacting professors and alumni, he says.

Not applying for all the aid you're eligible for
In the heat of the application process, some affluent families don't apply for aid because they assume they're not eligible. Nearly 30% of high-income families didn't fill out the FAFSA last academic year, according to a recent Sallie Mae survey.

That's usually a big mistake, says Bickford, since affluent families may qualify for at least some aid. The typical family earning more than $100,000 received $5,451 in grants and scholarships last academic year, Sallie Mae says. Not filling out the FAFSA can disqualify you from merit-based aid at some schools, says Kantrowitz.

Upper-income families shouldn't count themselves out for outside scholarships either, says Kantrowitz. Roughly the same percentage of students with family incomes over $100,000 or more received scholarships from sources outside of the college as did students with family incomes under $50,000: about 10%, he says.

Figuring the "expected family contribution" is all you're paying
When you actually get your child's acceptance letters in hand, there are plenty more pitfalls to watch out for, such as missing the nuances of the financial-aid offers.

Most schools have their own format for these offers, but one constant is the expected family contribution -- a gauge of how much your family can expect to pay each year out of pocket. The catch, which often isn't immediately obvious, is that the expected contribution often isn't all you're paying.


To fill any gap between the expected family contribution and the total cost of attendance, a college may offer your family some "free money" in the form of grants and scholarships. But it may also expect you to take out loans, and have your child contribute money from work-study and summer jobs to meet your need. They may also leave some need unmet.

It's also important to bear this in mind when using net-price calculators on school websites. By law, the calculators must show the net price of the school -- what you'll pay after grants and scholarships -- but some calculators add another estimate that includes loans and makes it look as if you'll pay less than you really will, says Lauren Asher, president of the Institute for College Access and Success, a nonprofit group that monitors student debt.

Going for the loan with the lowest interest rate
If you do plan to take out loans, be wary of ones from private lenders that boast good-looking interest rates.

For instance, Sallie Mae, the largest private student lender, is offering loans with a variable rate as low as 2.25% and ones with a fixed rate as low as 5.75%. In comparison, new federally subsidized loans taken out by undergraduates currently carry a fixed 3.4% rate, and federal parent Plus loans currently have a fixed 7.9% rate.

"Are these low rates appealing to parents? Absolutely," says Bickford, the former financial-aid officer. But it's hardly ever a good idea to go with one of these private loans instead of a federal one, no matter the difference in rates, he says.

With the variable-rate options, the rate may rise above the fixed federal rate in the years that you or your child are paying it back. Private loans are also less flexible than federally backed ones if you're in a tough financial situation later on.

Thinking an aid offer is set in stone
In many cases, colleges will increase your aid package if you appeal it. But you'll have to know what information to put forward to convince them.


If your family has financial constraints that don't show up on the FAFSA -- the form doesn't ask about things like high medical bills or support for a special-needs child -- you should send financial documents that attest to this. Send similar documents if you've had a big financial change since your base income year.

Colleges may also boost your aid package if you tactfully show them that directly competing colleges are offering you a better aid package. At many schools, "they're figuring out the minimum amount of aid they need to give you to get you to come," says Kalman A. Chany, a New York City-based consultant who helps families maximize their financial-aid packages.

Send the aid office the award letters from the other colleges and reiterate your child's interest in their school. Even at need-only institutions, you may land a better package, says Weinerman. "There's a lot of art in need-based financial aid," he says.

Figuring aid will be about the same all four years
Once your child's freshman aid package is set, remember that you'll have to go through the process again with a new FAFSA each subsequent year, and that the results may well be different, even if your financial picture doesn't change in your new base income year.

Many colleges these days practice "frontloading," where they offer students more money freshman year than in later years to get them in the door. The typical student at a four-year public or private nonprofit college will get around $1,400 less in grants and scholarships their sophomore year, according to an analysis of aid data done by Kantrowitz.

If their financial situation stays the same, there's little families can do to prevent this drop-off in grant aid, says Kantrowitz.

Still, a college's financial-aid office may be forthright about frontloading if you ask, he says. Once you know you'll likely get less aid, you can start saving to cover the shortfall.

One more thing to bear in mind: Even if your child didn't receive any aid in the first year of college, keep applying in subsequent years. If you have a change in your family situation -- say, another child goes off to college or your family income goes down -- you could become eligible for aid.