I'm a high-school senior, and my parents haven't saved a penny for my college tuition. What can I do?

Don't panic — the government wants you to go to college, earn a degree, get a good-paying job and enjoy a long, productive life in the U.S. work force. It's the American dream. That's why, each year, billions of federal dollars find their way to students who can't pay for college on their own. In 2001-02 alone, students received almost $90 billion in private and federal grants and loans, according to the latest data from the College Board, a nonprofit organization that tracks college-education statistics. All you need to do is claim your share of it.

Of course, it's not always that simple. You need to qualify for aid first. Colleges determine students' eligibility for financial aid by estimating how much their families can afford to pay (the so-called expected family contribution). If that amount is less than the college's costs, a student is generally eligible for some form of financial aid to cover the rest.

After determining the expected family contribution, the school typically sends the student a financial-aid offer that will consist of a mix of loans and federal grants. The latter are preferable, since they come with no strings attached, whereas loans must be repaid after graduation.

Unfortunately, students can't control how much they get from each of these programs. That's determined by, among other factors, how their need compares with the needs of other students applying to the same school, and how much money the school has to spend, says certified financial planner Kalman Chany, president of Manhattan-based Campus Consultants and author of "Paying for College Without Going Broke."

The good news: By understanding how the estimated family contribution is calculated, Chany suggests, parents can juggle their assets to demonstrate more financial need — and thus qualify for more aid. An example: If a family has $5,000 in the bank and $5,000 in credit-card debt, its total assets would nevertheless be $5,000, because consumer debt isn't included in financial-aid formulas. "So if you were to take the cash and pay off the debt before you complete the aid application, you could report fewer assets, and that could increase eligibility for aid," Chany says. Another suggestion: Families that own appreciated stock shouldn't cash it during the year before the child goes off to college (that's the base year used to calculate financial aid; for 2004-05 freshmen, the base year is 2003). "If they sell it during their base-income year, that capital income is going to reduce their eligibility for aid," Chany says.

For more on how schools calculate financial need, read our story. And our calculator will give you a good sense of how much you can expect to pay yourself.

The bad news: Oftentimes people qualify for less aid than they expect. Why? Demand often exceeds supply, Chany explains. "Even though the formulas are designed to calculate need, they're not designed so that schools will meet that need," he says. In fact, the average unmet need is $2,500, according to Scholarship America, the nation's largest scholarship and educational support organization. To secure as much aid as you can, complete all the forms the school sends to you accurately and on time. If you're late or you send in an inaccurate form, you could hurt your chances significantly. By the time the errors have been corrected, the school might be out of money, Chany says.

Whether or not you have an unmet need, you should aggressively seek out private scholarships. Yes, these awards account for less than 1% of the nation's $90 billion financial-aid basket — and, yes, the competition is fierce. But hunting down this free money can be time well spent: The average award in Scholarship America's programs is $2,500 — just the right amount to bridge the average unmet-need gap, says the organization's president, William Nelsen. And many scholarships are far bigger than that.

Consider 25-year-old Ben Kaplan. He spent his junior and senior years in his Eugene, Ore., high school researching and applying for dozens of private scholarships. The result: Before he'd even applied to college, he had won $90,000. "There was no way we were going to juggle my family's financial assets to all of a sudden qualify for $90,000 more in aid," Kaplan says. He has since graduated from Harvard, founded ScholarshipCoach.com and authored three books on scholarships. Nowadays, he coaches students on how to play the scholarship game.

His advice: Apply for as many as you can, and don't hesitate to recycle old application materials. Don't limit your search to your high school — go to other schools in your area, because they often have different sources of information. For more on private scholarships, read our story.

Another financial resource is right under your nose: advanced placement (AP) courses. Taking a few extra courses in high school could save you thousands of dollars in college tuition, since many schools offer credit for passing scores on AP and College-Level Examination Program (CLEP) tests. Satisfactory AP test results allowed Kaplan to skip his freshman year at Harvard and save $30,000 in tuition, books and fees.

Finally, remind your parents to take advantage of all education tax credits, and encourage them to send any savings your way. A few extra dollars on the old meal plan never hurt anyone.

Originally published on July 22, 2003.