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Financing your college decision

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Research proves that today's college graduates earn more than twice as much money as high school graduates but it comes at a steep price. College-bound students will need every bit of that larger income in order to pay back the cost of that diploma.

The latest research from the College Board's Trends in College Pricing 2006, show that the average cost of a four-year private university is $22,218 per year, while that of a public four-year institution is up to $5,836.

These are averages. Some colleges can charge $40,000 and more in annual tuition and fees. Here is a basic breakdown of college expenses:

Tuition and Fees
Based on your academic program and number of credit hours.
Room and Board
Based on living in the school's dormitories and a meal plan on-campus.
Books and Supplies
This expense covers your course materials.
Personal Expenses
Miscellaneous costs such as telephone, laundry, and other small ticket items.
Travel
This could be for travel in and around the campus, as well as for flights to and from home.

The latest statistics show that there is more than $100 billion in financial aid and scholarships available to worthy students. To know if you qualify all you have to do is apply. Here are the three general areas of available aid dollars out there.

Gift Aid is money you receive that you don't have to pay back. This is usually awarded based on academic achievement or talent.

A Grant is based on financial need and your eligibility will depend on family income. This one must be paid back with interest after you graduate but not while you are in school.

The last category is Work Study in which you basically work to pay for some of the costs of your education, such as books or course materials. The school's financial aid office finds you the jobs.

The process of applying for financial aid is pretty straightforward; it's based on a formula. Individual colleges have their own policies on student financial aid packages which are either need-based or merit-based.

Since millions of students vie for these dollars every year it behooves you to apply as early as possible. The sooner you know what you will be awarded the sooner you can figure out a budget. Start the search for financial aid at the same time as you begin your college applications, months before your senior year begins.

You can download the U.S Department of Education's free application for Federal Student Aid (FAFSA) to determine eligibility for the Pell Grant, among other awards. It is required by all state and most school assistance programs. You can complete the whole process online.

See the list of America's cheapest colleges from US News & World Report's 2008 rankings.

Now compare it to those who made the Top 10 List of America's most expensive colleges from Forbes.com.