(MONEY Magazine) – If you're the parent of a college-bound high school senior, you've probably endured the tedium of filling out intrusive federal and college financial aid applications. Assuming you've sent in all the paperwork (and if you haven't, do so without delay), it's now time to start looking in the mailbox for the fruits of your labors: By March, you should receive the Student Aid Report (SAR) from the Department of Education (DOE), followed in April by the moment of truth--the schools' financial aid offers.

The way you react to these letters can make the difference between a C awards package and an A+. To maximize your financial aid, follow this two-part guide.

STEP ONE: THE STUDENT AID REPORT

Two to six weeks after you've completed your Free Application for Federal Student Aid (FAFSA), which most colleges use to calculate your aid, the DOE sends you a copy of the SAR. That's the summary of the FAFSA information that's forwarded to up to six colleges you name. Here's what to do once the SAR arrives.

LOOK FOR YOUR SHARE. The SAR contains your first clue as to how much of the tab Uncle Sam and colleges expect you to pay. To find that critical information, look in the upper right-hand corner of the first page for a number marked EFC, which is short for expected family contribution. A figure such as 08800, for example, means that your likely share of annual tuition and other expenses such as room and board will be $8,800. Federal aid, most state assistance and some private school awards are based on the EFC.

UPDATE AND CORRECT THE INFORMATION. This is your chance to fix any errors as well as to amend the information you supplied on the FAFSA, which you might want to do if you've completed your '98 tax returns since you filled out the FAFSA. If your '98 income or tax bill turned out to be lower than you had estimated, you may be able to qualify for a more generous aid package. For example, if you claimed a Hope Scholarship or wrote off student-loan interest, you can adjust your SAR to reflect those changes.

Before you submit the corrections, call the schools your child has applied to. With deadlines fast approaching, some may prefer that you send a copy of the SAR, with the corrections marked on it, directly to the financial aid office. (In general, schools receive your SAR, including any corrections, electronically.)

Include additional schools. If your child has applied to more colleges since you submitted the FAFSA, enter their names on the correction form--with one caveat. If you've already listed six, each add-on will bump an earlier choice. Instead, mail a copy of the SAR (with corrections) to the new schools. Don't drop one just because your child has lost interest. "You'll want to have plenty of financial aid packages to compare," says Kalman A. Chany, author of Paying for College Without Going Broke. "An offer from a rival school could serve as a bargaining chip down the road."

STEP TWO: OFFICIAL WORD

Come April, if all goes well, your mailbox will be stuffed with acceptance letters and financial aid offers. The aid letter (shown below) will indicate the amount of the award and spell out whether it will be in the form of coveted grants or scholarships, federal work/study (in which the student is paid by the college for usually minimal labor), loans or some combination. Here's how to get the school to sweeten the deal.

TELL THE SCHOOLS ABOUT ANY NEW HARDSHIPS. Keep in mind that schools base what you can pay this year on last year's income. If a recent event--say, the loss of a job or major medical bills--has left a hole in your budget, call the schools and explain.

REVIEW YOUR TAX RETURNS. If you reported an IRA or pension rollover on your '98 tax return, make sure the college didn't mistakenly count that distribution (reported on line 15a or 16a of Form 1040) as income. According to Chany, you should also check to see if you were eligible to file a 1040EZ or 1040A (which you may have been able to do if you earned less than $50,000 and didn't itemize). If so, tell the financial aid office. Some schools will exclude assets such as your house from their financial aid formulas as long as you qualify to use a simple tax form, even if you filed a 1040 instead.

PLAY THE MERIT CARD. Colleges have been known to dig deeper into their coffers to lure topnotch students. Calmly discuss a better deal with an admissions or a financial aid officer. You could also fax copies of more competitive aid offers to bolster your case. "That puts the other college on notice that someone is competitively bidding for that student," says Ray Loewe, president of College Money, a financial planning firm in Marlton, N.J.

COVER YOUR CONTRIBUTION. You'll find a list of the college's preferred lenders in your aid package. If you accept an award that includes federal Stafford Loans, call those lenders first. They may be able to disburse your money faster by transferring it to the school or the student's account electronically. That said, if the lender doesn't offer good repayment options or ways for diligent borrowers to cut their rate in repayment--as banks backed by Sallie Mae (800-891-4599) or USA Group (800-562-6872) often do--keep looking.

Federal PLUS loans for parents and home-equity loans are also attractive ways to fill the gap. While low-rate federal student loans are probably the better deals, your freshman can borrow only $2,625 this year with a Stafford Loan (current rates: 6.86% during school, 7.46% thereafter). PLUS loans (current rate: 8.26%) let you borrow up to the full amount of college costs (minus financial aid) and, like student loans, a portion of the interest you pay ($1,500 in 1999) is deductible. The interest on a home-equity loan (average rate: 8.68%) is also deductible.