First, colleges estimate their cost of attendance. It costs more than just tuition to go to college, so they consider other factors such as books, room and board, transportation, and miscellaneous personal expenses. This helps you, and the colleges themselves, to have a pretty realistic picture of how much a year of attendance costs.
Next, they subtract something called your Expected Family Contribution (EFC), which is the amount you and your family may be expected to contribute towards the cost of attendance. It does not represent an amount you are expected to pay up front to attend college. Instead, it is used to determine your eligibility for different types of aid.
After subtracting your EFC from the cost of attendance, the remaining amount represents your financial need. The higher your financial need, the more need-based aid you may be eligible to receive.
How is your EFC calculated? It is calculated (by the Department of Education) from the information you provide on the Free Application for Federal Student Aid (FAFSA). This form is submitted beginning January 1 of your student's senior year. Although you might not have filed your 2011 income tax return by January 1, time is of the essence and it is best to estimate your income. You can always make corrections later.
Some strategies that your student can start now is to submitt their profile on www.fastweb.com and compile a list of scholarships he/she may qualify for and apply for as many as possible. The key here, is for your student to set aside time during the week-end and submit the applications or essays as required. Another strategy is to compile a list of academic scholarships that your student may qualify for based on their gpa and scores on colleges that they are interested in applying to. This is a tool that I offer my clients. Whatever you do plan ahead so that you can stay ahead of the pack and make college less of a financial hardship.