Many parents and their children approach the college process much like the deer running into the road. They just dart out there and hope for the best.

Given how much a college education costs, you need to plan ahead and know how to navigate through the twists and turns of the financial aid process. That way, you and your child can avoid being hit with a tuition bill that can cause serious damage to your financial future.

Most parents don’t have nearly enough money saved in their ” college fund” to send their children to school for 4 years.  You should begin saving as early as possible. The average in-state tuition and fees for full-time undergraduate students for 2004-05, before student financial aid was deducted, was $5,986 for a public two-year college and $10,720 for a four-year public university. Private four-year schools averaged $25,204 in 2004-05.

Private loans are the fastest-growing sector of the multibillion-dollar student loan industry. In 2005-06, college students borrowed a record $17.3 billion in private loans, up 913 percent from a decade ago, according to a report issued Tuesday by the College Board.

At a time when the cost of college is surging and financial aid is shrinking, private loans make it possible for many students to attend colleges they couldn’t otherwise afford. But consumer advocates and student groups worry that the growth of these loans could prove disastrous for borrowers who don’t understand the risks.

Before you get a private loan, make sure you understand the risk. The government does not guarantee the private loans, and the interest rates are variable and can go as high as 19 percent. Private loans are almost a necessity because the total amount undergraduates who are dependents can borrow through the federal Stafford loan program is $23,000.

Across the country, more than one-third of students enrolled in higher-education programs are older than 24. And that could rise as the population ages and more Americans return to school to hone job skills, prepare to launch new businesses or to pursue areas of personal enrichment.

“More older students are coming back to college,” said Scott Higgins, interim dean of research and graduate studies at Western Carolina University. “Many are seeking insight and skills required to start small businesses”.

Those who decide to back to school after lengthy break have to sacrifice alot of time and money for their education. Graduate students can, however, borrow up to $18,500 a year on federal Stafford loans, which carry a relatively low interest rate of 6.8 percent. For those who need extra cash, there is a new Graduate Plus Loan available at a higher rate than Stafford loans.

Now at an all time high, the overall cost of a college education in the U.S. is projected to reach $220 billion this year, nearly half of which will be financed by students or their parents. Despite this, the benefits of a college education still outweigh the costs as college graduates can earn $1 million more than non-college graduates over their lifetimes.

Limits on federal loans have barely risen over the past decade, yet tuition costs have doubled for private colleges and more than doubled for public institutions over the past twenty years. It is estimated that many families will need to use more than one loan to cover their college costs each year. In some cases, families will be forced to use three financing options, if not more. Multiply the number of loan products needed by a four-year education, and American families are faced with 10 to 12 loans that need to be repaid after graduation.

If you know that money is going to be an issue, consider alternatives. There are many specialized 2-year associate degree programs available that give you a specific skill for the workplace. These programs are generally less money than a traditional college degree, and provide you with the skill and knowledge to get a job after completion.

To honor the sacrifices of our men and women in uniform, Capella University, an accredited online university and a leader in online education, is offering five $10,000 scholarships to service members wounded in Operation Enduring Freedom or Operation Iraqi Freedom. Titled “Spirit of Capella Scholarships For Injured Service Members,” the scholarships may be applied to any of Capella’s online degree programs. Approximately 15 percent of Capella students are members of the military.

“As a university with a significant number of students who are members of the military, Capella is committed to doing its part to support those men and women who have given so much in service to our country,” said Jim Landerkin, Capella’s Federal Program Manager.

To qualify, applicants must be enrolled in a Capella degree program during the quarter immediately following the announcement of receiving a scholarship. The award will be distributed evenly over the eight quarters following the announcement.

Capella University offers undergraduate and graduate degree programs online. There are many programs to choose from such as business, information technology, and education. Capella University is a leader in online education and shows its commitment to students and support to our military by offering these scholarships.

That leaves you in a tough spot if you’re officially “dependent,” but your parents can’t or won’t contribute to college expenses. Even if you live on your own, schools will expect your parents to fill out the Free Application for Federal Student Aid (FAFSA) and any other required forms and will compute your expected family contribution (EFC) based on their resources. Financial aid officers have the leeway to grant an exception, but they seldom do, unless circumstances are dire—your parents are incarcerated, missing, or severely abusive, for instance.

If you think your own situation might warrant an exception, see a financial aid officer and be prepared to document your case with police records and/or written statements from social workers, guidance counselors, or clergy. If you do qualify as independent, only your income and assets will count toward the EFC, and you’ll probably benefit from a hefty aid package.

These changes have made it more difficult for students to qualify for federal aid, which could contribute to why some colleges are seeing a decline in enrollment. Many students simply cannot afford to go to college with today’s price of tuition, and a lower availability of federal aid.

As the Baby Boom generation ages and retires, a well-educated corps of young people isn’t stepping up to take their place, and the United States is slipping behind other countries that are producing a better educated young workforce, says “Measuring Up 2006,” a national “report card” on higher education released by the nonpartisan National Center for Public Policy and Higher Education.

About 35 percent of the nation’s 18 to 24 year olds attend college, placing the U.S. fourth internationally and earning a B in participation, the report said. Yet only 17 out of every 100 college students ultimately receive a degree or certificate, placing the U.S. behind at least 14 other countries, including Japan (the international leader), Portugal, Ireland, and Iceland.

Enrollment in most colleges remains strong, but the number of students who actually complete their degrees is declining.  Many blame the high cost of attending college as a major factor.  Student aid programs have also failed to keep up with the escalating cost of attending – and staying in college. 

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