The college acceptance letters have arrived, and many families now are facing the scramble to find money to pay for the dream that has landed in their child’s inbox. It’s an issue that should have been discussed many months ago. Most financial aid packages offered by colleges will leave families with sticker shock.

But there are some steps families can take now if they can’t afford the school that accepted their child. Eva Dodds of www.rootcollegeadvising.com is a professional college counselor, helping families choose schools likely to accept their children and provide financial aid, assisting in the application process, and in helping students develop attractive credentials for admission.

What’s the REAL Cost?
Dodds stresses that knowledge is power, and that needs-based financial aid as well as merit aid, is still being allocated during the month of May. So it’s not too late to get more aid or find a school that will be more affordable. And if college is a year or more away for your child, here’s where to start.

1. Know the Cost of Each College. Every school posts the Cost of Attendance (including tuition, room and board, and books and fees) on its website. Just Google the school name and the words “cost of attendance” to get not only the “sticker price” but the average cost- after financial aid.

2. Know the EFC – Expected Financial Contribution. This is the amount parents might be expected to pay, based on their income, assets, number of students in school, and other family characteristics. The best online EFC calculator can be found at www.Finaid.org. Family income, savings, and other information goes into this calculator, so consider doing this privately and not with your child at your side!

3. Compare College Costs and Expected Payments. Go to www.MyINtuition.org and see the realistic cost and aid breakdown for each school your child is considering based on the input of your family’s financial situation. Now, discuss this issue openly with your child.

Where to Find Money
1. Federal Student Loans. With all the discussion of Federal student loan burdens, you might think this is the only way to pay for college. Actually, a dependent child can get only $5500 in student loans in her freshman year. Those loans will either be subsidized (no interest accrues until graduation), or unsubsidized – accruing interest from the start. But a Federal student loan is a drop in the bucket compared to the potential costs of college. Current rate for the life of the loan: 3.73%.

2. Parental PLUS Loans. These are the most expensive loans, because the rate is 6.28% for the life of the loan, and there are distribution fees of 4.2% deducted from each loan. Yet many parents turn to them first, because they are so well publicized. If parents take out a loan, the lower income parent should sign for it. That’s because when repayment starts, the low-income parent can apply for Income Based Repayment, resulting in a lower monthly payment. After 20 years of on-time payments, the balance may be forgiven. Still, the higher rate makes the Parent Plus loan among the least attractive ways to pay for college.

3. Private Student Loans. Dependent students require a parent to co-sign, and these loans typically carry higher rates than Federal loans. Also, unlike Federal student loans, private loans do not have “relief” provisions such as forbearance or income-based repayment. To search for private student loans, go to www.studentloanhero.com to get loan offers from multiple lenders. Depending on credit scores, rates may be as high as 11%!

4. Home equity loans. Rates are high, and these tend to be adjustable-rate loans, meaning they can be costly in a period of rising rates. Also, interest payments on money withdrawn to pay for college are not deductible.

What Else Can You Do?
Eva Dodds suggests contacting the college – but not the admissions office. Instead, if your child is accepted, contact the financial aid office. They often give out “merit” aid – subsidies designed to get your child into their freshman class, regardless of traditional aid limits or financial need. Counselors like Dodds know what schools are looking for in handing out this merit aid.

Dodds also suggests talking to your high school college counselor to see what schools are still accepting students <> offering financial aid. Many counselors use the website of the college counseling association www.NACAcnet.org, which maintains a database of colleges still searching to fill their freshman class.

As a last resort, the student could live at home and attend a community college for a year or two, making sure class credit is transferrable, then transfer to a preferred school. That’s a growing trend. Dodds says that many schools accept full credits in transfers after one or two years of a community college. The school name on the diploma never shows that the first two years were spent at a less expensive college!

There’s no doubt that college is worth the investment – but it might not be worth the high-rate debt to pay for it. And that’s The Savage Truth.