How can we afford college?

Question: Our family's income is in the $20-30,000 range. We have two teenagers who will be ready for college soon. We live from paycheck to paycheck. How can we possibly afford a four-year, private college education?

Welcome to the club. Your situation is typical of thousands of American families. The problem is the lack of quality financial aid information and families' reluctance or inability to dig out that information.

What you may not realize is that families looking to find a good, private four-year college or university have two things going for them. First, there is a tremendous pool from which to choose and, second, it's a buyer's market. Depending on your selection requirements, there are probably six-to-ten (or more) excellent schools you could consider as candidates. Don't let cost alone be your decision point.

My personal advice to parents about financial aid has always been, "Send your son or daughter to the best and most expensive school he or she can get into." This generally causes great concern for parents, especially the "most expensive school" part. There's some logic to this argument, though.

In general, schools that have higher costs have better financial aid programs. The word to keep in mind is "endowment." College endowments contain the money received from loyal alumni every year during the campaign known as Annual Giving. This pool of funds is then invested as carefully as possible to get the largest return on investment. Interest generated from the endowment is then used, in part, as a source of financial aid for needy students. Obviously, this is a simple explanation of a complex process.

The best situation is to have your son or daughter accepted to a school that maintains a policy of meeting your family's full demonstrated financial need. More about that later. Right now, the best thing you can do is get as much information as possible. If you have access to the Internet, you'll find much helpful data there.