Never assume you don't qualify for financial aid. Getting help for footing the tab is available for thousands of middle-income parents and many colleges actually sweeten financial aid packages to lure the top students to their school. Most of the financial aid money available is awarded to those people who are diligent about going after it.

The U.S. government is the largest source of financial aid. Other sources include:

• The school itself
• State governments
• Private sources, such as corporations and philanthropic organizations
• The armed forces

There are two types of financial aid:

1. Need-based aid is calculated based on your financial circumstances.
2. Merit-based aid is awarded by the school for special talents or achievements, regardless of financial circumstances.

A key concept in this area is expected family contribution. This is a calculated amount that estimates how much you can afford to contribute to the cost of college. This contribution amount is the same no matter what school you apply to. The financial aid process attempts to put all colleges within your financial reach, regardless of the total cost of the school. You are eligible to receive more aid at a higher cost school.

Being eligible does not mean you're going to get the financial aid. Total aid packages typically range between 65% and 100% of the amount you are eligible for, depending upon the college.

IMPORTANT NOTE: The Expected Family Contribution is different for everyone. We used $4,000 in this example to illustrate how this amount stays fixed and the amount of financial aid for which you are eligible increases as the cost of the school goes up.

SUGGESTION: Don't rule out an expensive school until you get all the facts.

You will need to understand the financial aid application process—and to budget some time for it, because it is lengthy. It will be helpful to minimize your income during the base year—the year on which the award of aid is based. And you should understand the effect of assets on financial aid. Take a moment as well to look at some suggestions we offer to help you get aid.