Two articles from last months edition of Business Week, "Debt For Life" and "Debt Free Degree" ought to be read by every college senior. The numbers referenced in these articles are daunting; a record one-in-five household now owes student debt, two-thirds of graduating seniors in 2010 graduated with loans that averaged $25,000, and in March, the Consumer Financial Protection Bureau proclaimed that student debt had passed $1 trillion. With 60 or more colleges with tuition over $60,000 a year, families are having difficult conversations about whether they can afford to send their children to college and whether the cost is worth it. While these statistics are frightening, there are many different strategies, resources, and assistance available to families who have financial need.

First, while colleges may have a high sticker price, many colleges are able to meet the full financial need of a family without giving any loans. Princeton, Davidson, Harvard, Swarthmore, Columbia, Stanford and Vanderbilt are among 75 colleges that have reduced, capped or eliminated loans in financial aid packages for all undergraduate students. This means if a student is admissible, and has financial need, loans will not be part of the package, rather, families will receive grants or scholarships to cover tuition While not every college is able to offer this generosity, some colleges have larger financial aid budgets or a different mission driven purpose, which means colleges range widely in their ability to meet a family's full financial need (as determined by the Free Application for Federal Student Aid or FAFSA).

In addition to assisting families with need based aid, colleges may offer merit aid or scholarships to high achieving students, often based on a student's grade point average and test scores (at a college I worked for, when we would see a student just missing the next level of scholarship, which could be a few thousand dollars, and all they needed was to raise their ACT composite score 1 point or their SAT score 20 points, we would call and encourage a student to consider retaking a test). Merit aid is essentially discounting the price of tuition in the form of institutional scholarships at no cost to the family. Some families may strategically consider colleges where a student has a higher academic profile than the average enrolled student as that institution may offer more money to entice the student to choose their school.

Now is the time for students to apply for national and local scholarships. There are heaps of excellent scholarships available for nearly any student. For example, I know of a scholarship for the most creative prom costume made out of duct tape. My father often told me that I would not catch a fish unless my fly was on the water. This metaphor applies to scholarships; students are not going to receive money unless they apply. Deadlines for national scholarships are primarily in the fall, while local rotary and state scholarships generally begin in January. Students should search www.schoolsoup.com, www.finaid.org, and www.fastweb.com for national scholarships.

Scholarship Scams

According to www.finaid.org, families lose more than $100 million annually to unscrupulous companies promising scholarship opportunities. Here are some tips to help recognize potential scholarship scams. Often, scam operations have quasi-official sounding names; they use words like "National," "Federal" or "Foundation" as part of their title. Typically, scam artists promise they can find students scholarships or grants. Some even offer a "money back guarantee." The Federal Trade Commission (FTC) suggests you watch for these tell-tale signs of a scam:

â?¢ "The scholarship is guaranteed or your money back."

â?¢ "You can't get this information anywhere else."

â?¢ "We'll do all the work."

â?¢ "We just need your credit card or bank account number to hold this scholarship."

Remember -- no one can guarantee you a scholarship. Students must apply for scholarships themselves -- no one else can enter competitions or write essays for them. Never give out credit card or bank account information unless students initiated the contact. For more information or to report a scam, contact the FTC by calling 1-877-FTC-HELP or click on www.ftc.gov.

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