College expenses comprising of tuition, room and board, and books continues to increase, outpacing the rate of inflation year after year. In a normal economy such increases are a challenge, in today’s tough economy they’re impossible for some people to manage.

Here in North Carolina, state college students are facing some of the largest increases ever seen as restricted budgets force legislators to pass on more and more costs directly to students. In California, students are being hit by a 21 percent increase, which is about seven times the rate of inflation.

We’ve highlighted an earlier version of Kalman A. Chany’s book, “Paying for College Without Going Broke,” and were pleased to receive a preview copy of the 2012 edition from The Princeton Review. And as urged by the reviewer for the Chicago Tribune you’ll want to “get this book, and don’t just read it, but study it.”

The news about college costs is certainly grim, but Chany doesn’t leave you sitting there wondering what to do about it. What he does offer are a number of steps you MUST take if you are seeking to control college costs. Fortunately, for the $20 cover price of the book, you get a lot of information that would cost you plenty if you had a professional share it directly with you.

Among the strategies the author offers:

Standardized aid application forms — Chany offers line-by-line strategies for completing the federal FAFSA and the even more detailed CSS profile that is required by many schools. The author’s instructions are invaluable and could lead to even better aid for your family.

College savings plans — So-called 529 plans are popular and an important way for families to save money toward college. There are other funding options available including the American Opportunity Credit and the Lifetime Learning Credit. These and other tax breaks can save you money — Chany explains how.

Expected family contribution — You won’t know what colleges will expect you to pay until all financial aid has been processed. To keep families from being left in the dark, Chany offers worksheets that can help you calculate “guestimates” of what that might be. Importantly, you’ll also be given legal ways to lower that figure.

This edition also includes tips for divorced and single parents about aid eligibility. He also delves into how to find the best education loans, how to appeal to the college if the aid package comes up short and gives advice to independent students who face their own challenges.

Just the other day I spoke with a father whose daughter is in her senior year of high school and is preparing her essays and applications for college. This particular family has some unique needs, but they are not too different from the typical American middle class household: money is tight, college is expensive, and they certainly don’t feel confident that they have enough funds to pay for college.

Begin Researching Now

I had also just finished reviewing the latest edition of Kalman A. Chany’s Paying for College Without Going Broke, so I passed my copy of the book over to them, with instructions on what to look for inside. Time didn’t allow me to bring up all of the key points that Chany made, including a number of tips I will share with readers here:

1. Research Aid Options Now – Though mostly everyone is thinking about leftover turkey, buying a Christmas tree, and discount shopping, Chany says that families should start looking for financial aid now. A weak economy means more families will be looking for assistance which also means that competition for funds will be intense.

2. Apply For Aid Regardless – You may think that you can afford to pay for your son’s or daughter’s education, but that could all change if your financial picture changes suddenly. Some schools may allow you to file for reconsideration should that happen, but only if you filed for aid on time in the first place.

3. Consider All Educational Opportunities – Plenty of families steer away from colleges which they deem to be too expensive. This is a mistake as many private colleges have boosted their aid packages accordingly. Have a back-up plan in place – that is, apply to a state institution where your college student can live at home if necessary.

4. Begin With Community Colleges – From personal experience I can tell you that this option may work out well for your student. Community college tuition is reasonable and, if your state allows it, those credits can transfer to a four-year institution. A number of private universities are receptive to accepting community college transfers; check with these schools to see if they will accept those credits.

5. Take Those AP Courses – SayCampusLife covered this trend previously – students who take Advanced Placement (AP) courses while still in high school can receive credit for completed coursework. Dual enrollment programs allow students to complete their high school education and get college credit too.

6. Retake Your Standardized Tests – Perhaps your son or daughter has already taken the SAT or ACT and done quite well. Is there room for improvement? A higher score can mean a more attractive aid package as colleges and universities seek out the best and brightest minds to populate their student bodies.

7. Avoid The Debt Monster – Don’t put your tuition on a credit card, consider federal student loans, and avoid private student loans at all costs. Consider how much debt your student can reasonably carry once in the work world given their major, starting salary, and career path.

Get To Work

Will these tips be enough? That isn’t for certain, but by taking action now you can avoid scurrying for funds later. Rising college freshmen need every edge that they can get; apply for aid early and you may come up with a more attractive financial aid package.

Kalman A. Chany’s reference book isn’t new, having been published and updated for several years. I got a hold of the 2009 edition, thus what I’ll share with you here is the latest “insider tips” on how to cover college costs. At least the highlights therein.

Skim The Contents Page First

Because it is a reference book, you’ll want to turn to the Contents page to find a topic of interest to you My children are a number of years away from attending college, therefore I paid minimal attention to what I would need to do as a parent if they were going to school beginning this fall.

But, what I did note that Chany included a number of helpful forms and strategies which can take the mystery out of the financial aid application process, empowering families to make the right decisions on education funding. Something as simple as filling out the right form can make all of the difference for applicants including the famous FAFSA (free application for student aid) form which is color-coded for the year submitted (2009-2010 forms are green and purple).

Beating Deadlines Will Make All The Difference

Chany places a huge emphasis on deadlines noting that “missing a financial aid deadline is worse than missing a mortgage payment.” In short, don’t expect your college to give you a second chance whereas your mortgage company may.

Once acceptance letters have been received, families need to sit down and decide which schools they can afford to send their children to. That decision is usually based on a combination of what the student wants and what the family’s contribution will be in covering college costs.

What To Do If The Aid Isn’t Enough

Chany breaks down the “Notification of Financial Aid” notice that families receive from their college which outlines exactly what the parents and students contribution is (in addition to other resources such as scholarships) and how much the costs will be for the coming academic year. Based on tax information previously submitted, the financial aid package shows what the college will cover for the year ahead.

While many families are transfixed by how much aid one school is offering versus the next, Chany emphasizes that the “real measure of an aid package is how much YOU will have to end up paying, and how much debt the student will have to take on.” Also, Chany shares critical tips on how to negotiate with the Financial Aid Officer (FAO) at a school if the package isn’t as generous as expected. I won’t go into those tips here, but it could dramatically alter a family’s college costs if the FAO can be persuaded to sweeten the aid package.

“Paying For College Without Going Broke” is an excellent reference for families particularly helpful during these trying economic times. Published by Random House, this Princeton Review book is available wherever books are sold including Amazon, Barnes and Noble, and Borders books.

Adv. — Don’t let the recession get you down! SayRecession.com offers the tools you need to keep your head above water during difficult economic times. Be proactive and check out our tools on how you can pay off your mortgage early and to build up emergency funds to help see you through a crisis.

The following tips can help you in your quest to secure financial aid:

1. Assume you’re eligible — Don’t rule yourself out because of income or academics. And don’t rule out a college because you think that it’s too expensive. The higher the cost, the more aid you may receive.

2. Don’t wait to be accepted to a college to apply for aid. The coffers may be empty by spring.

3. Get application forms as soon as possible. You’ll need the 2009-2010 FAFSA form — online versions are available on New Year’s Day; paper copies are available by calling 1-800-433-3243. You may also need to complete the CSS/PROFILE form, state aid forms, and forms provided by the college.

4. Check the deadlines and be sure to meet each one. Many colleges have different deadlines for different forms. Some may be due in late December, though most are due in the first quarter of the year, January-March.

5. Figure out your “expected family contribution.” Use worksheets in financial aid guidebooks to calculate — before you apply — what the colleges will estimate you can afford to pay. Be sure to get up-to-date information, as formulas can change year to year.

6. Before December 31st, maximize your aid eligibility. Freshmen year aid awards are based in part on income for the year ending December 31st of the student’s senior year in high school. Consider making appropriate adjustments to your assets, debts, and retirement provisions before you apply.

7. Do your income tax forms early. To meet early aid application deadlines, you may need to do a draft version of your 2007 income tax return with estimated numbers. Many schools will require a copy of your actual return in the spring to verify your information.

8. Follow instructions carefully on application forms. Common mistakes which can disqualify your applications are: forgetting to sign them, leaving lines blank, or using the wrong academic year’s version of the forms.

The first semester of college is months away for incoming freshmen, but acting now will hellp you save a bundle of money later and perhaps make a huge difference in where your offspring attend college.

Adv. — If you have already found the college you want to attend, get prepared to apply to that school in November. Otherwise do an online college search to find the schools of interest to you and print out a Summary Aid Map to help you plan your financial aid strategy.