However, the same student can obtain very different financial aid packages from colleges with similar costs. If the financial aid process is truly need based, how could that happen? Part of it results from how individual colleges define your assets for financial aid purposes. For instance, some include home equity, while others do not. Another part of the difference results from colleges competing to attract top students. High-caliber students increase the college's prestige, making it a more attractive alternative to subsequent years' students. To encourage these students to attend their college, merit scholarships are often given or the mix of traditional need-based financial aid is altered. Financial aid consists of grants (which do not have to be repaid), loans, or work-study programs. Two financial aid packages may have the same dollar value, but the one with a higher percentage of grants will be more valuable to the student.

As evidence that colleges favor better students, one recent study looked at students' SAT scores and grant awards. Among low-income students who attended public colleges, those with high SAT scores received an average of $1,255 in grants compared to $904 for those with middle SAT scores and $565 for those with low SAT scores. At private colleges, students with high SAT scores received an average of twice as much grant money as students with low SAT scores. Those results only reflect need-based aid, not any merit financial aid that might have been awarded to those students (Source: Change, March 2002).

What implications does this have for a child approaching college? Consider these points:

• Encourage your child to do well on college entrance exams. Not only will this make him/her eligible for acceptance at a broader range of colleges, it may increase your financial aid package.
  
  
• Don't approach the process determined to enter one particular college. Start with a few colleges that would be acceptable alternatives and apply for financial aid at all of them. You may be surprised at how different the financial aid awards are, especially if your child is a strong student.
  
  
• What should you do if your child has his/her heart set on going to one college, but you receive a better financial aid package from another college? Talk to the financial aid officer. While some colleges are receptive to matching other colleges' offers, others are not. In those cases, your best strategy is to review the financial aid calculations with the officer, looking for ways to increase the award. Many subjective factors go into calculating financial aid awards and you may be able to convince the officer to change some of those so the total award is increased. Perhaps just changing the composition of the award so more is given in grants will help.