The following article has been excerpted from What College Really Costs   By: The Staff of U.S. News & World Report The first step in determining which school offers the best deal is to identify which type of financial aid (loans, grants, and scholarships, or work-study) has been offered.

While the award letter will probably tally all forms of aid together, applicants should separate the “free money” (grants and scholarships) from the “self-help” money (loans and work-study). That’s not to dismiss loans and work-study. Student loans, especially if the government subsidizes them, are very inexpensive forms of borrowing. And work-study jobs often have the benefit of being flexible enough to accommodate student’s schedules and their need to study at exam time, more so than a job at the local mall would. But they’re nonetheless debts that have to be repaid or money that has to be earned.

With both the cost of attendance and the aid figures in hand, students and their families can compute the true out-of-pocket cost of each school by using the worksheet below.

If the school’s budget for discretionary expenses doesn’t seem reasonable, you will have to create your own estimate: Will you live off campus or skip the school’s meal plan? Then you may be able to get by on less than the allotted amount. Will you be able to buy used textbooks or nab cheap airfares home? You may be able to shave a couple hundred dollars off the book or transportation allowance. Record any adjustments to each school’s official budget.

Now add up any grants or scholarships and subtract the total from the expected cost of attendance. That’s the real cost to attend the school. Compare it with others on the list. If there’s not a great deal of difference—perhaps $1,000 or $2,000 between the schools—then you can feel comfortable choosing on the merits of the school. If the difference is substantial—say $10,000 or more—you have a tougher choice. Will it mean racking up huge student loan debt? Or do you want to start your adult life out with a degree that perhaps carries less cachet but fewer financial burdens?

Finally, tally up the loans and work-study and subtract that amount from the actual cost to determine how much money you and your parents will have to scrape up to pay for school. This number is important: Once you know exactly how much your family has to pay, it’s easier to figure out whether you and your parents can swing it. That could mean withdrawing money from savings, squeezing it out of the family’s regular cash flow—by sacrificing vacations, new cars, or home improvements, for instance—borrowing more money, or perhaps a combination of all three. Or it could mean your family needs to do some creative thinking, which could include some last-minute strategies like those detailed in chapter 7.

Even with the numbers in front of you, it can be difficult to weigh one school against another. If the decision still isn’t clear, there may be another lever to pull: Financial aid awards aren’t always etched in stone.

Can the college do better?

A student who believes the aid package from his or her preferred school comes up short shouldn’t be shy about asking the school’s financial aid officer to reconsider the offer. “We get thousands of appeals,” says Steve Van Ess, director of financial aid at the University of Wisconsin-Madison. At Amherst College, about 21 percent of aid applicants ask the institution to reevaluate their awards, says aid director Joe Paul Case. About 57 percent of them do get some additional aid, averaging about $3,200.

But tread gently. Financial aid officers despise the word “negotiate.” They’ll tell you in no uncertain terms that they don’t play “let’s make a deal.” Instead, let the aid officer know that you’d like to “appeal” the award or ask him or her to “take another look.” No doubt you’ll get a friendlier reception.

Students with the best chance of upping a financial aid award typically have concrete reasons for the second look. A vague complaint that the family can’t afford the price won’t cut it. The formulas that determine a family’s expected share of the costs aren’t perfect, so one way to persuade an aid officer to open the college’s wallet again is to show that the formulas overestimated your family’s ability to pay. Here are some arguments that aid officers said they’ll seriously consider:

--This year’s income will not be as high as last year’s. College aid formulas assume that family income will be fairly steady from year to year. Any family that has experienced a job loss or a downturn in a family business, or will be receiving less overtime pay, should ask the school to rerun the numbers with a more conservative estimate for this year’s income. “We will consider looking at estimated income for the following year, especially if someone has lost their job,” says Van Ess. But aim for as accurate a guess as possible. “We may review that [the estimate] after the first semester before we give them second semester aid,” he adds. “If the income is higher than they estimated, we may even ask them to give back some of the first-semester money.”

--The family has extraordinary expenses. The aid formulas allow a standard amount to cover household expenses, based on family size. But using his or her right to exercise “professional judgment,” an aid officer can reduce the family contribution by counting atypical spending. “We’re eager to consider nondiscretionary extenuating circumstances,” says James Belvin, director of financial aid ad Duke University. Those circumstances might include helping pay for a grandparent’s nursing home care, graduate school for an older sibling or private school for a younger sibling, funeral expenses, or hefty legal or unreimbursed medical bills. But the family won’t get much sympathy for discretionary spending like a blowout wedding or bar mitzvah, mortgage payments on a vacation home, or even sizable credit card bills. Aid officers generally view high credit card balances as reflective of debt taken on by choice, not by necessity.

--Family finances have changed significantly because of a death, divorce, or disability. Aid officers often boost awards in response to such family emergencies, the very situations the appeal process was designed to remedy. “We’re happy to step up to the plate and consider it in detail,” say Belvin.

--The cost of attendance will be higher than budgeted. Can you argue that the school missed the mark in deciding how much money it would take to get home for winter and summer breaks? That special equipment to accommodate a learning disability or other special need will have to be purchased? That additional travel and personal expenses will be incurred during a semester abroad? Again, asking an aid officer to increase the cost of attendance can improve aid eligibility.

In any event, families should be prepared to document their appeal with tax forms, pay stubs, receipts, or other evidence of the new financial situation. Also, be aware that asking for special consideration may spur extra scrutiny of the original financial aid application. In other words, the family may be asked to document any previous data supplied.

Matching the competition

A student with a superior aid package from a competing school may also have a good shot at augmenting an award. But this is another touchy subject among aid officers. It’s the rare school, such as Carnegie Mellon University, that openly admits it will consider matching another school’s offer. Most say they won’t. But somehow, many colleges seem to have an easier time finding a financial reason to rejigger the numbers when they know another institution is dangling a more attractive offer. That’s especially true if the student hasn’t yet decided which school to attend.

But again, be careful. A “top this, or else” approach may backfire. Instead, try something like this: “My second choice school sees our need differently. It gave us an extra $3,000. But you’re my first choice, and some extra aid would make it possible for me to go here. Could you review our application again to see if there’s an error or if anything has been overlooked?”

Of course, this strategy works best when the two schools are of equal stature in terms of admissions standards and reputation. A Duke or a Cornell University, for example, isn’t going to waste time discussing an offer from Georgia’s Valdosta State University. Students who are deemed a good catch for the school also have an advantage. What’s a good catch? Think about what colleges want in their student bodies: brainiacs (students with grades or test scores that put them atop the applicant pool); individuals with special, in-demand talents like artistic or athletic ability; racial and geographic diversity; and a variety of majors.

Last, but not least

Okay, so you don’t have any special talent, extenuating circumstances, or better aid offers. (The last will almost certainly be the case if you apply for early decision to a school and thus have only one offer to consider.) But you still believe the expected family contribution is out of line. Students can also ask an aid officer to simply explain how the family’s need was determined. An aid officer, for instance, may have calculated a certain level of assets using the dividends and interest on the parents’ tax return, or he or she may have set the value of the family home based on a national index of home appreciation. But the family may no longer own the assets that generated income in a prior year or may live in an area with below-average home appreciation rates. Asking specific questions, such as how much of the family contribution comes from parents’ assets versus student assets, might bring such discrepancies to light. On the other hand, the queries might work against you and turn up an error.

Whatever the approach, be prepared to make your case in writing. These days, it’s typical for the financial aid office to ask for a formal letter of appeal, which is then reviewed by a committee rather than a single aid officer. That helps to avoid uneven results based on the “individual idiosyncrasies” of aid officers, says Case.

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