Unraveling the Financial-Aid Riddle: Programs Help Families Handle Costs of College

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A family sits around the table surrounded by college applications and forms. As they wade through the mire of college choices and start to weigh the options, they quickly realize that they do not have the funds to finance college on their own. The cost is simply too high.

Financial aid is complicated and often confusing. What constitutes need? What kind of financial aid is available? What's best for me or my child, and can I get it?

In 1996, the average cost of one year of room, board and tuition at an in-state public four-year college was $7,000, according to the Department of Education. The average cost of the same at a private four-year college was $17,600. The cost of room, board and tuition this year at Western Maryland College in Westminster, Md., is $22,200.

"The cost of running a college continues to rise, so in turn tuition rises as well," says Patricia Williams, director of financial aid at Western Maryland College. "Renovations, salary increases and the constant change of technology all affect this. I cannot imagine college costs not rising every year."

Of the 15 million students enrolled in two- or four-year colleges in 1997, more than 50 percent of them receive financial aid of some kind.

Financial aid is any money that a student receives toward paying educational expenses, says Marjorie Nieuwenhuis in her book, "A Parent's Guide to College Admissions." The bulk of aid comes from the federal government, state treasuries and the college's own funds. Only one-half of 1 percent comes from the private sector.

Federal aid comes in the form of grants, which are gifts that are not repaid; loans, which are …