What You Need to Know About College Aid

1. Beg for mercy. It just might work. If you have submitted financial-aid forms to the schools your child picked, the package of grants and loans you will soon receive may not be the last word. "Don't be abashed about explaining your circumstances," says Joe Paul Case, financial-aid director at Amherst College. Aid officers will often offer more money if parents can show they're paying private high school tuition or nursing-home bills, or have recently paid for the funeral of an immediate family member. But don't send aid officers a laundry list of your current expenses. "That's a real turn-off," says Case.

2. You could lose money with a scholarship. If your child qualifies for need-based grants, the school may reduce its financial award by the amount of money your child receives in scholarships from civic groups and other sources, says Shirley Ort, director of scholarships and student aid for the University of North Carolina at Chapel Hill. You can salvage your financial-aid package, and reduce your borrowing costs, by requesting that the aid officer reduce the loans instead of the grants.

3. Sit on your retirement stash. Withdrawals from your nest egg are counted as additional income, which may reduce the aid you're offered next year. Better options are to exhaust federal and private loans and tap a home-equity line of credit. For help adding up total expenses -- including anticipated tuition, meal plan, board and loan rates -- use our calculators.

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4. They're watching Grandma and Grandpa's money. Ask your parents to hold off contributing until after your children have their sheepskins, then use your parents' money to pay off student loans. The reason: If your children accept grandparents' money while they're still in school, aid officers may count it as extra income and lower subsequent awards, says Ray Loewe, a college-aid financial planner in Marlton, N.J. Aid officers also look at checks that grandparents write directly to the school when preparing the next year's aid package.

5. You may pay a fifth year of tuition. Fewer than half of all college students finish their degree in four years, according to the National Center for Education Statistics. The problem is especially acute at large public universities, where required courses fill up quickly. Ask each school's admissions office for its four-year graduation rate, and be wary of any school with a rate that's less than 30%.

6. Good grades could save you money. MyRichUncle, a private lender, is adding incentive for your scholar to excel by promising lower interest rates for outstanding students. A child with a high school GPA of 3.0 may see 0.25 percentage point chopped off the loan rate. Better academic performance could cut up to 0.75 percentage point.