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Right before rushing out to buy lottery tickets and money tree seeds, repeat this phrase over and over: "I will not rule out any college or university because of the cost."

This cautious optimism is based on available financial aid and the concept of net cost, not sticker price. Quite possibly, the out-of-pocket costs to you and your family will be less at a high-price college than at a lower cost state-supported university. It's all about the availability of need-based aid, your family's financial strength, and whether or not the college uses merit-based aid (scholarships and grants) to lure you to that school.

Access and choice

The foundation of all student financial aid programs are the concepts of access and choice. They usually go hand-in-hand and essentially say that no students will be denied the opportunity to go to their college of choice based on their inability to pay. Here's how the financial aid system works.

Our society has put aside a great deal of money to help students who otherwise would not be able to attend the college of their choice - more than $122 billion dollars in one year. That extraordinary amount comes from several sources, including the federal government, state governments, colleges and universities themselves, foundations, and private agencies.

Most of that money is based on the family's need, which is tied into the cost of attendance. For example, say you want to attend your local state college because you feel it would be the right match for you, and the college costs $11,354, but you can afford to pay only $8,000, your need is the difference, or $3,354. It will be up to the college to use its funds, money from the federal and state governments, and money from other sources to fill that need; otherwise you won't attend. The good news is that for the most part, the college will, in fact, come up with a way for you to get the needed funds.

Determining need

Wouldn't it be nice if all we had to do was say, "Hey, I need $25,000 to attend College 3 this year. Can I have it?" Obviously it doesn't work quite so easily. And here's where the financial aid application process comes in. There are complex formulas used to determine your family's ability to pay. When you apply for aid, you are, in effect, providing the information needed.

You complete the information requested on the FAFSA (Free Application for Federal Student Aid) and, if appropriate, the PROFILE (used by many private colleges), submit it (this can be done on the Web), and out comes a figure called the Expected Family Contribution (EFC). That is the figure used in the preceding table.

Then your demonstrated need is simply the difference between the total cost of attendance at that particular college and your EFC.

Cost of attendance

The cost of attendance can be easily seen in the brochures and catalogs available online, in the literature sent to you, or in one of the many books listing the costs. What is included are

• Tuition
• Required fees
• Room and board (average if not living in campus housing)
• Books and supplies
• Transportation
• Other personal and miscellaneous expenses

These costs are what a student will need to attend that college for one year (actually, for the 9-month period). Summer programs are not usually included, although students who choose to attend can receive additional financial aid to help pay for them, and costs that are unique to particular students (those with disabilities, for example, or those who live farther away and, therefore, need more money to get home for vacations), can have their budgets increased by the financial aid office (sorry, parking tickets and the high cost of pizza delivery are not included). Room and board expenses for those living off campus in private houses or apartments usually have a maximum budget set, which is based on the average in that community. Financial aid offices usually do surveys to make those determinations.

Types of financial aid

You can receive financial aid in three ways: it can be given to you as "free money" (in the form of grants or scholarships); you can borrow it (loans); or you can earn it (through working).

The fact is, not all the aid given to students is free. But of the total amount of aid awarded to undergraduate students, just under half (44 percent) was given in the form of grants and scholarships. And just over 5 percent was given to students in the form of tax breaks (which amounts to free money since taxes were lowered). One percent was earned through the Federal College Work Study program, and the rest, (just under 50 percent) was loaned to students for them to pay back after they graduate — usually at lower interest rates than other loans. Loans, of course, only help you to defray the costs since you will ultimately be paying them back. But the bottom line is that half of the total cost of education was paid for through grants, scholarships, and lower taxes, leaving you with more money in your pocket. So although the costs to attend college appear to be close to $30,000 annually for private colleges, on average, and $11,000 annually for state colleges, that's not really what some 70 percent of the student population are paying. That's where net cost comes in.

If your college charges you the average private four-year cost of $27,500, and you qualify for $20,000 in financial aid, about half of that will be in the form of loans, and then you're really only paying $7,500 out of pocket. And if you qualify for even more aid because your family's resources are less, or if you win a merit-based scholarship or grant from an outside agency, you would wind up paying much less.