HOW TO GET MORE CASH.

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Author: Stern, Linda

MONEY

High-school seniors who received fat envelopes from colleges last week can stop worrying--and their parents can begin. Mom and Dad can expect to spend more than $50,000 a year to keep their kids in classes, books, dorms and pizzas at many private schools, and more than half that at out-of-state publics. Next year's undergraduates have until May 1 to line up the best aid package at the school of their choice. So get busy; you can still make the most of this year's college-funding season if you act fast.

Ask for more. Financial-aid offers went in the mail last week, and administrators like Daniel Small at George Washington University will spend the month of April talking to parents who are haggling for a better deal. "It works about half the time," says Small. If your child is "gapped"--if the aid package, added to what you can afford to pay, still leaves a black hole--go back to the financial-aid office and request a review. Ask for more grant money (which doesn't have to be repaid), for a student job and for a better all-round package. Be ready to introduce some info about your family's inability to pay that the loan officer might not know, like a health problem. This year there's a new twist: those SAT mistakes. Some schools hand out more money to students with higher scores, so if the College Board underreported your child's results, make sure the financial-aid office hears about it. And remember that many colleges will be responsive to news that a competing school offered a better deal.

Lock in rates now. Students who are already enrolled this spring should run to the bank, suggests Mark Kantrowitz, a financial-aid expert and publisher of finaid.org, an independent Web site. (Students who will enroll in the fall will not be eligible.) On July 1, interest rates will go from 4.75 to 6.8 percent on federally backed loans to students and from 6.125 to 8.5 percent on parents' loans. Current students and their parents can lock in the lower rates by borrowing as much as they are allowed now, and then rushing to consolidate (that's refinance, in student-loan parlance) those loans before July 1. That's a complicated strategy that works because loans consolidated before then are bulletproof: unlike other loans, their rates won't go up on July 1. Parents can borrow the cost of a year's attendance, minus whatever aid their child got. After July 1, undergrads will lose the ability to consolidate their loans until they graduate.

Shop around. Government-backed loans all have the same rates, but lenders compete on other terms. Some offer special repayment programs that can cut fees. College-aid offices often recommend lenders, but you can shop online, too. And don't be cowed by all the official-looking mail you'll be getting. Some college-funding companies send pitches that look like urgent government notices. Some are scams, charging you for the same info you can get free of charge from the school's financial-aid office. Others are legit, but nothing special. They might be offering the same deals you can get from college-lending behemoths like Sallie Mae (salliemae.com), Citibank (studentloan.com) and College Loan Corp. (collegeloan.com).

Parents can get those 8.5 percent loans, but you might do better with a loan against a 401(k) plan or an old insurance policy, a home-equity line of credit or even a new cash-out refi on your mortgage. After all, you can still get a 15-year fixed-rate home loan for under 6 percent and be done paying for your house before your kids forget the words to their school's fight song.

Of course you need some help with those killer college bills. Here are the basics:

Negotiate. Schools may up their offers if you haggle right.

Borrow well. Banks will eat their fees to get your business.

Hurry up. The best deals will disappear on July 1, so approach colleges earlier rather than later.

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By Linda Stern