Desperately Seeking Tuition

Your college fund went south with the Dow, your bonus never materialized, and that just might be a pink slip in your in-box. How on earth will you get your student off -- or back -- to college in the fall?

Take heart: Some colleges have bolstered their financial aid on the expectation that more families will need it. Others, including a slew of highly selective institutions, expanded their aid a year ago and vow to meet their commitments. Plus, the federal government has kept its student-loan programs afloat even as other credit has dried up. With that help, plus some creativity, you can string together a Plan B even if Plan A falls apart.

Apply for financial aid. If you haven't done so already, do it now, starting with the Free Application for Federal Student Aid. The FAFSA puts your student in line for grants as well as the federally sponsored student loans known as Staffords. You can file the FAFSA anytime after January 1 for the next academic year. But the long-er you wait, the more likely your student will get loans, not grants.

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Many private colleges require that you also fill out a separate application, which they use as the basis for allocating their own funds. The deadlines for those applications often fall in February. If you've missed the deadline, call the financial-aid office and ask if you can apply anyway. "Deadlines matter, but colleges understand that we're in unusual circumstances," says Barmak Nassirian, of the American Association of Collegiate Registrars and Admissions Officers. "It's worth a phone call."

When you apply, don't hesitate to tell the financial-aid office about any hit to your pocketbook that doesn't show up in the numbers. "We encourage families to write out special cases or circumstances," says Rob Reddy, financial-aid director at Oberlin College, in Ohio. Counselors at Oberlin look for red flags and call families to discuss options, says Reddy. "We take the initiative."

Appeal the award. If the aid package falls short, contact the financial-aid office to find out how to appeal. Financial-aid officers adjust federal assistance according to specific guidelines and can use their discretion to free up money from institutional funds. Ursinus College, near Philadelphia, sets aside $26 million in financial aid for the 1,300 students who qualify, says Richard DiFeliciantonio, vice-president for enrollment. "A few thousand dollars more out of that budget doesn't really break the bank."

No matter what your situation is, be ready to answer questions and provide documentation -- in person, if possible. "Come prepared, and be realistic," says Reddy. It's fair to mention a competing award from another school, but don't play that card unless you intend to accept the offer from the school you're petitioning, he adds. "It would be really inappropriate if the school rose to the occasion and the student said, 'Oh, sorry, I don't want to attend.'"

Fill the gap with loans. Start with a Stafford loan. Available to any student who applies, Staffords carry a fixed rate of 6.8% or less and flexible repayment terms. Students can borrow up to $5,500 as freshmen, $6,500 as sophomores and $7,500 as juniors and seniors. The government subsidizes the interest on Staffords until repayment for students who qualify for need-based aid.

Parent PLUS loans are another possibility. These federally backed loans, the parental equivalent of Staffords, carry a fixed rate of 8.5% or less. You can borrow up to the cost of attendance and defer repayment until six months after your student graduates, but you must pass a basic credit test to qualify. Students whose parents are denied a PLUS loan can borrow more Stafford money.

If you're lucky enough to still have home equity, consider using it. A home-equity line of credit, which carries a variable rate, lets you draw money as you need it; if you qualify, your rate could be as low as 3% or 4%. With a home-equity loan, you borrow a lump sum and pay it back at a fixed rate. Either way, you can deduct the interest on up to $100,000. What you borrow these days is limited to 60% to 80% of your home's appraised value, minus the mortgage.

Lenders once gave out private student loans like candy. Now, a student must have a cosigner with good credit to get one of these deals. Private student loans carry variable rates and less-generous terms than federal loans. Use them sparingly, if at all.

Or look into peer-to-peer lending sites, which help students connect with lenders among family members, friends and even strangers. GreenNote sets up loans with a 6.8% interest rate and repayment terms comparable to Stafford loans, and the site requires neither a cosigner nor credit history. Students pay GreenNote a one-time fee of 2% out of the loan proceeds; lenders pay an annual 1% of the repayments.

Virgin Money offers a similar service but with more flexibility. Lenders set their own rate, subject to federal minimums -- as little as 0% -- and state maximums. The site charges borrowers a one-time setup fee of $200 to $300, depending on the arrangement, plus $9 per payment.

Score a private scholarship. These awards, albeit scarce, are worth pursuing. The average private scholarship approaches $2,000, enough to pay for a year's worth of textbooks and a couple of round-trip plane fares. Be aware that outside grants reduce your financial-aid package by a comparable amount. Some colleges will swap the scholarship for the loan portion of your financial-aid package.

Have your scholarship hunter focus on local and regional awards, such as those offered by businesses and civic groups in your community and the community where the student attends college. Awards listed on scholarship sites can draw thousands of applicants, says college financial planner Deborah Fox, of Foxcollegefunding.com. "Unless the student has stellar accomplishments on a national level, it's difficult to compete."

Enlist well-wishers. Who better (besides you) to help your student than Grandma and Grandpa? This year, they can give $13,000 ($26,000 as a couple) without triggering the gift tax, up from $12,000, or $24,000, in previous years. Most 529 college-savings plans accept contributions from nonowners, giving family members a handy way to hand off the funds. They can give either annually or in one big chunk -- up to $65,000 (or $130,000 for a married couple) -- and spread the gift-tax exclusion over five years. Grandma and Grandpa can also pay tuition directly. Those payments escape the gift tax altogether, but under the IRS's "qualified transfer" rules, the school keeps the money if your student later drops out or transfers.

Here's a hip way to ask for help: Register on a social-networking site geared to saving for college and invite friends and family to kick in, perhaps as a graduation gift or birthday present. Freshman Fund and UGift, a Upromise product, streamline the process by which gift-givers contribute to a 529 plan; College Piggy lets donors contribute electronically to any account you link to the site. At GradeFund, students must sing for their supper -- sponsors sign up to pay them for A's and B's.

Manage your costs. If you don't have the wherewithal to pony up $20,000 all at once, see if you can pay on the installment plan. Vanderbilt University lets you make ten equal, interest-free installments for a $90 fee. The University of Michigan gives you the option of paying each semester's costs in fifths, for $35.

Then look for ways to cut expenses. For instance, you don't have to spring for a full meal plan if your kid never touches breakfast, nor a pricey single room if a double will do. And there's no reason to buy new textbooks when the same books can be purchased secondhand. Some colleges rent textbooks to students. If that's not an option, look for used books, at Valorebooks.com, Chegg.com or Bigwords.com.

As for your own expenses, you will find suggestions for more than $18,000 a year in pain-free paring in our Save $50 a Day.