Rick Darvis, a co-founder of the National Institute of Certified College Planners (NICCP) and the owner of College Funding Inc. in Plentywood, Mont., says the average tuition discount at private colleges in the U.S. is 40%.
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So how can families find this money? DeFontaine says the trick is to learn the financial aid process for each school a child may apply to, including the required forms and deadlines. Parents should also fill out the Free Application for Federal Student Aid (FAFSA) form each year.
"Colleges are the gatekeepers of all the money, theirs and the government's," he says. Since July 1, 2010, all new federal education loans have been made through college financial aid offices under the Direct Loan program.
In 2010-2011, undergraduates received $178 billion in student aid, per the College Board's "Trends in Student Aid 2011" report. The biggest pieces were federal loans (39%), federal grants (27%) and institutional grants (17%). Grant aid rose 70% from the 2005-2006 school year to the 2010-2011 year.
While most grant aid is geared toward lower income families, 26% of families earning more than $100,000 a year reported using grants in 2011, up from 12% in 2010, according to the 2011 Sallie Mae study. Grants and scholarships accounted for 25% of this group's college funding sources in 2010-2011, up from 19% the previous two years.
Grant aid beyond financial need is more likely to be offered by less selective public and private schools looking to attract students with strong academic credentials and other qualities.
Students also can increase their chances of receiving free money by applying to off-the-beaten-path schools instead of the brand names most families focus on, says DeFontaine. There are plenty of good options among the U.S.'s 3,000 four-year colleges and universities-and employers and graduate schools know about them, he says.
And don't automatically dismiss private schools, he says, because the cost savings of the publics may be less than anticipated.
First, what's considered need varies by the price of a school. So a student with an expected family contribution of $20,000 is more likely to receive aid at a pricier private school. Second, many public schools have been hiking prices as states slash spending. In-state tuition and fees at four-year schools jumped an average 8.3% for 2011-2012 led by California (21%), Arizona (17%) and Washington (16%), says the College Board.