After acquiring a driver's license and going to prom, the next big milestone that affects both today's teenagers and their parents is the college admission and financial aid application process.

What is college going to cost for that aspiring Web designer, doctor or lawyer in your house? In Illinois, public colleges run about an average of $12,000 to $15,000 per year. For private school, the tab is likely to be between $22,000 to $24,000 a year. If your son or daughter has his or her heart set on an Ivy League school, prepare for an eye-popping $35,000 per year.

How are you going to pay those hefty fees? If you're confused by the myriad forms, formulas and deadlines for financial aid, you're not alone.

Sorting Through the Information
"When my oldest daughter began her financial aid search two years ago, we didn't know where to begin," says Phyllis Smith, a Carol Stream, Ill. mother of two, one of whom is now a college sophomore. "I started collecting every article I could find on the topic and began searching Web sites and ."

Mistakes in the process can be costly in terms of a potential loss of financial aid, but there are guideposts to follow and potholes to avoid on the road to acquiring financial aid.

Certified Financial Planner Susan Daly has some tips. Daly is an owner of College Planners, Inc, a Bensenville, Ill. firm which, among other services, helps parents solve the financial aid puzzle.

The Financial Aid Sources
"Financial aid can come from a number of sources," says Daly. "On the federal level, there are grants, student loans and work/study available, although the Pell grants are usually reserved for low-income families. There are also grants available on the state level, as well as ones available from the college itself. In the recruiting brochures, colleges often claim that a very high percentage of their students are receiving financial aid. But what they are often referring to is student loans."

Scholarships are also available to students who distinguish themselves in academics or sports or particular criteria for the scholarship. "The best source of information on scholarships is the high school financial aid counselor," Daly says.

The Process
So what's the first step in the process? Colleges determine "need" as the cost of the school minus the expected family contribution. And how do you know how much you are supposed to contribute to your child's higher education? That's where the paperwork comes in. Each year, parents should start the process by filling out the Free Application for Federal Student Aid (FAFSA). From that report, a Student Aid Report (SAR) is generated which both the intended school and the parent receive. When the school receives an SAR, and the student has been accepted by the admissions office, the school then generates an award letter listing how much aid the school is offering the student and breaks it down in terms of grants, loans and work-study.

Common Mistakes
To get your fair share of financial aid dollars, Daly offers some tips on avoiding the most common financial aid mistakes that parents make:

• Failure to believe that you qualify for financial aid. Many people are under the misconception that if your family income is more than $50,000, you will not be eligible for federal aid. This is often not the case. Assuming ineligibility may cost you thousands of dollars for every year your child is in school. "Because the formula takes into account the cost of the school, sometimes a family can receive a greater portion of an aid from a private or an Ivy League school," Daly says.

• Failure to correctly identify and establish the value of your assets. Overstating asset values or including assets on the financial aid form that are legally excluded may either reduce your financial aid eligibility or result in receiving no financial aid. According to Daly, two common mistakes that parents make are including assets from their 401(k), which are not required, or listing savings bonds at their face amount, rather than their current value.

• Failure to fill out the financial aid forms accurately. Omissions, incorrect answers or misinterpretations can eliminate or reduce your ability to receive aid.

• Failure to fill out the financial aid forms in a timely manner by filing too early or too late. Check the filing date for your school. The FAFSA cannot be filed before January 1 for the subsequent academic year. The school's filing date may be as early as January 15 or as late as May. Missing deadlines often results in aid reductions.

  

• Failure to have assets positioned properly to avoid potential large reductions in aid. "Sometimes having savings in the child's name can affect financial aid," Daly says. "But there are things that you can do, such as repositioning money into another account for the child's welfare, such as an IRA account. It's important to look at family assets as a whole."

• Failure to address special considerations properly. Events such as a death in the family, separation, divorce, loss of job or earnings, medical expenses, etc. can impact aid eligibility.

• Failure to use current regulations and application forms. The federal government revises the formula and applications on an annual basis. Often, parents and students are unaware of these changes, which may result in a loss of aid.

• Failure to refile for aid each year. "A student should re-apply for aid every year he or she is in college, even if funding was not granted the previous year. Sometimes, just having two children in private school will affect the application," says Daly.

• Failure to seek out a college financial planning specialist. Professionals like Daly can help you secure the aid you need.

From the parent perspective, Phyllis Smith suggests encouraging your son or daughter to check Web sites and fill out scholarship applications and essays. "Sometimes this is tough for your child to do, especially if he or she works," says Smith. "We found the financial aid officer at our daughter's chosen college to be very helpful. The low-cost Plus Loans for Parents are another option if you don't want to raid your higher interest accounts to help fund your child's higher education."

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About the Author: Alice Patenaude is an Illinois-based freelance writer.