The cost of college is going up faster than almost any other item. According to the College Board report “Trends in College Pricing,” tuition and fees at public universities went up 47% in the past ten years, and 42% at private universities, even adjusted for inflation.

Don’t panic! Know that help is available from the state, the federal government, colleges and private scholarship sources. The actual price the average undergraduate student pays is quite a bit lower than the published tuition and fees, thanks to financial aid.  

More than half of all students enrolled in U.S. colleges receive some form of financial aid.

There are billions of dollars in financial aid through scholarships, grants and loans available to help college students cover the cost of their education, according to the College Board.

Federal programs are the single largest source of education loans. One of the more widely used federal loans is the Stafford loans for students, while parents often access PLUS loans. The federal Pell Grant, based on need, is the largest federal grant program.

Private organizations often offer scholarships. Like grants, scholarships, do not have to be repaid.

Private borrowing is also on the rise, offered through credit unions and banks to bridge any financing gap for college expenses.

Hardly anyone can afford to pay full price for college. Fewer than 10% of students pay full price at private schools. Colleges let you pay according to what you can afford through their “financial aid” offices.

Colleges give three kinds of aid:

1. Money you don’t have to pay back. This may be a federal Pell Grant, other grants, and scholarship money. How much “free money” you receive depends not just on your family income but may depend on how early you send in your financial-aid forms (some funds go fast) and how much a school really wants you.

2. Money your student earns. Aid programs can include a promise of a part-time job. “Work-Study” programs are those in which the student gets a campus job, usually through the Financial Aid office

3. Money you pay back. Loans are the biggest form of aid, and most of them are through the federal government. The terms are usually fixed interest and often long-term, typically ten years.

Your financial aid package will be based on how you fill out your “Free Application for Federal Student Aid” or FAFSA and how quickly you submit it. You can get a FAFSA through the U.S. Department of Education, colleges, libraries or on the Internet at www.fafsa.ed.gov.

FAFSAs are accepted for the upcoming school year any time between January 1 and June 30, but the sooner you send it in the better.

You (and the colleges you designate) will receive a Student Aid Report stating how much your family will be expected to pay toward college costs. Colleges take that figure, determine your “unmet needs” and offer you a financial aid package.

Your financial aid package is based on the income you reported the year before you receive aid. Most students apply their senior year in high school, so that is the year your income and assets will first “count.”

If you have a low income that year, more than one child in college, if you are close to retirement age or had medical emergencies or other circumstances, you have a better chance of qualifying for aid.

Each school has its own formula to determine “ Expected Family Contribution ” toward paying tuition, fees and costs. In general, financial aid counselors expect parents to spend only 5.65 percent of their assets, after subtracting an “asset protection allowance” based on your age and income. They expect students to spend 35% of their savings each year with no asset protection allowance.

These rules are based upon federal rules and formulas (and subject to change), so you will probably pay approximately the same amount regardless of what schools you choose, after looking at each one’s aid package.

For example, if your “Expected Family Contribution” is $15,000 a year, you will not qualify for aid at a state school costing $14,000. But at a school costing $40,000, you may qualify for a $26,000 annual financial aid package.

Many students do not even consider private schools because they think they can’t afford them. But through grants, loans, and scholarships, the cost of a private education may actually be less than at a state-funded school.

If your child gets accepted to a private university, financial aid counselors will work with you to get scholarships and loans. As long as your child gets accepted, he or she does not have to be a super brain or athlete to qualify for help.

Every student is eligible to apply for financial aid. And don't forget, you can re-apply each year.

For lots more info on financial aid and application guidance, see www.finaid.org

Check out the National Association of Student Financial Aid Administrators (www.nasfaa.org) for a summary of state savings plans, a guide to federal tax benefits for tuition and fees, and much more.

To apply for scholarships, check with your financial aid office and online at www.fastweb.com and www.scholarships.com.

Between tax breaks and financial aid, your child may just find that his or her dream school is within reach after all.

See what you learned.