The New Rules of Finding Aid

Codes of conduct and pending legislation are changing loan options for students and parents. Here's what you need to know and what college really costs.

School financial aid offices are still a good source of information. Despite the fact that the loan scandals focused largely on conflicts of interest within aid offices, colleges still provide helpful information to students and parents. "Financial aid administrators will have had experience with a large number of lenders," says Robert Shireman, executive director of the Project on Student Debt. But they shouldn't be your only source. "When you strip away the ivy, you have a business", says Kalman Chany, author of Paying for College Without Going Broke.

School aid officers make decisions based not only on what is best for students but on their schools' own bottom lines, he says.

Minimize private loans. They still tend to carry much higher interest rates than federally subsidized loans, yet many people don't exhaust their federal options, which include Stafford and Perkins loans, as well as plus loans for parents. After Alison Rabil, director of financial aid at Barnard College, started counseling students and parents about their options, the value of students' private loans declined by 73 percent, a small part of which was replaced by federal plus loans.

Shop online;

all offer useful comparisons of both student loan interest rates and borrower benefits.

Get loan benefits in writing. Lenders often sell student loans to other institutions. Getting benefits, such as interest rate reductions for on-time payments, in writing and confirming that they will apply even if the lender sells your loan will ensure you'll get expected benefits. It's usually better to go with lenders that offer upfront benefits, such as fee payments, instead of benefits that accrue only if you make a series of on-time payments, which may not happen. Pay special attention to the disclosures that come with loan documents. "If it's a bait and switch, students need to know it," says Chuck Sorber, interim head of the financial aid office at the University of Texas-Austin.

Check out state assistance options. About half the states already offer tuition assistance for certain professions, especially public-service roles such as teaching and nursing. Kentucky has a program for teachers, and Connecticut offers one for engineers, for example. "A lot of people don't know about them," says Terrence Thomas, chief marketing officer for elearners.com, which lists state programs.

Pay attention to the details. Before counting on a loan forgiveness program or other benefit, make sure your loan is eligible. Much of the pending College Cost Reduction and Access Act applies only to federal loans, for example.

Find your "financial aid safety school." Matthew Greene, independent educational consultant with Howard Greene & Associates, says applying to a mix of schools, including a "financial aid safety" such as a state school, gives the ability to compare costs before committing to one school.