NEW YORK (CNN/Money) -
As the Benefactor Supreme in your children's lives, you know one thing better than anyone: College costs are exorbitant and nowhere more so than at the top-tier schools you've always dreamed they would attend.
But before you commit to eating cat food from now until Jr.'s freshman orientation at Harvard, consider this: The sticker price and a parent's true cost are two very different things if your family qualifies for need-based aid. And, increasingly, higher-income parents are qualifying, aid experts say.
Top-dollar, but top aid, too
At 31 of the nation's premier colleges and universities -- including the Ivy Leagues, Stanford, Duke, Johns Hopkins and Amherst -- the median average cost of tuition, fees, room and board was $34,763 for the 2000-01 academic year, according to the Consortium on Financing Higher Education (COFHE). Forty-three percent of students, however, didn't pay that.
That year alone, the schools, all of which belong to COFHE, gave out $957 million in need-based grant aid, with the median average grant totaling $16,220. Such a grant covered nearly half of the average annual cost. In addition, the students who qualified for grant aid (which is money they never have to pay back) also qualified for a variety of low-interest education loans and work-study programs.
After subtracting the total aid package, which includes grant aid, subsidized Stafford student loans and work-study jobs, the average out-of-pocket cost to parents of a needy student that year was just over $11,000.
This year, the COFHE schools are giving out more than $1 billion in grant aid. And some Ivy League schools -- Princeton, Harvard, Dartmouth and Yale among them -- have increased their grant offerings so as to reduce the loans students need to take. Indeed, as tuition costs have risen, many of the top-tier schools have increased the grant portion of their aid packages, while reducing or holding the line on the self-help portion.
"The philosophy is to make the debt burden less," said Myra Smith, director of financial aid at Yale. "We don't want students to choose what they're going to do based on what they owe."
In the fall of 2001, Princeton went so far as to replace the entire loan portion of its need-based aid package with grants, although it did keep work-study. In the 2001-02 academic year, the school gave out an estimated average grant of $21,840. That accounted for nearly 65 percent of the $33,743 charged for tuition, fees, room and board. The average total aid package, including work-study, came to $23,810, making that year's average out-of-pocket costs for parents $9,933.
(To see how much need-based financial aid the other Ivys gave out in the 2001-02 school year, click here.)
Bargaining for aid
The size of aid packages offered by the COFHE schools is determined on a case-by-case basis. "Each individual family is given an individual analysis," said Ted Bracken, COFHE's director of federal relations.
While the schools are eager to recruit the best students, they technically do not negotiate aid packages if a top student they've offered admission to gets a better deal somewhere else. But "they will review any student's financial aid award if new information is brought to their attention," Bracken said.
A school may be willing to reconsider the size of an aid package, for instance, if it comes to light that a breadwinner has been laid off or has had a medical crisis.
Sometimes the difference in aid offered can be attributed to the fact that two schools may treat the variables that go into assessing need differently. These variables may include the value of a home, the perception of cost-of-living differences between where a family lives and where the college is located, or the fact that a student's parents are divorced.
Typically, students with financial need are likely to receive more grant money as a percentage of their total aid package in their freshman year than in subsequent years, a practice known as "front-loading."
In 2001-02, for the incoming freshman who received need-based aid at the COFHE member schools, the median average grant was $20,053. That represented 55 percent of the $36,342 average annual cost.
There are two key reasons for front-loading. The first is that it reflects how the federal student loan system works, said Mark Kantrowitz, founder of FinAid.org. Under the federal Stafford loan program, for instance, the amount that qualifying students can borrow increase gradually as a student progresses from freshman to senior year, making the need for grants somewhat less in the second half of one's college career.
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The second reason is that students who drop out of college tend to do so in the first year or two, and they are more likely to default on their loans since they have few credentials to get a job, Kantrowitz said. So, the thinking goes, better not to saddle freshmen with debt they may not be able to repay.
Don't count yourself out
Financial aid experts urge parents not to assume they make too much to qualify for grant aid before even applying. "We have more and more higher-income people going into the scholarship pool because the costs are going up," said Virginia Hazen, the director of financial aid at Dartmouth.
Indeed, experts said, incomes up to $150,000 may qualify for at least some aid.
The more you make, however, the more you'll need to make the case that you have expenses other than your child to take care of. If you're a family of three making $140,000 and have just one college education to fund, Hazen noted, "It's pretty doubtful you'll get anything."
But if you have multiple children in college, support an extended family or have to pay taxes on a large one-time capital gain on the sale of a home, she said, "that would make an over-$100,000 income not seem that large."