As college costs keep rising, it pays to lobby for no-loan aid packages

Well-endowed Yale University can afford to be generous. (Jonathan Wiggs/Globe Staff/File 2007)

When it comes to financial aid, Harvard and Yale can afford to be generous.

Yet what if your child isn't accepted by a university with an abundant endowment? Can she still obtain aid that doesn't have to be paid back?

While you must be careful in evaluating some of the packages, an increasing number of colleges have cut loans from their aid offers. These deals are the best way to ensure your child doesn't graduate with smothering debt.

When Harvard University announced last year that it would eliminate loans in aid packages for families earning as much as $180,000, Yale University followed suit, on Jan. 14, boosting assistance for those making as much as $200,000 a year. The Ivy League incentives have unleashed a wave: 24 private colleges have moved to replace student loans with grants, according to the National Association of Independent Colleges and Universities.

Unsurprisingly, the ones with the deepest pockets are offering the most generous packages.

Columbia University, for example, is replacing loans with grants for families earning less than $50,000 per year in the 2007-2008 academic year.

Some of the aid enhancements will reduce the burden on parents. Princeton University changed its aid formula so that home equity isn't considered, thus reducing the parental contribution.

Few of the improvements are that magnanimous. Reading through the association's "Enhancing Affordability and Access in Independent Higher Education" survey, you discover that many of these initiatives are modest, at best.

Only four colleges that cut tuition were identified. Seven have agreed to one-time tuition freezes, and 11 announced guarantees - meaning fees won't increase while the student is enrolled. That's a paltry number out of almost 1,000 members the association claims.

The handful of schools that have addressed affordability is cold comfort, given rising fees.

The average annual cost of attending a private four-year university rose almost 4 percent, to $32,307, for the current school year. The nonprofit College Board, which conducts testing, says that was the biggest inflation-adjusted increase in seven years.

For top-tier private schools, total fees exceed $40,000, with some colleges in the $50,000 range.

Let's not forget four-year public universities, which had an average 6 percent increase in total annual student expenses in the most recent year. Their average full-time student receives only $3,600 in grants and tax benefits, about a third less than at private colleges.

Colleges must do a better job of cutting operating expenses, and parents should avoid universities that drive students into hefty loans.

While politicians of all stripes continue to jaw-bone colleges into lowering fees, it will have little impact until consumers start demanding more grant-based aid.

In an age when colleges are using sophisticated strategic enrollment programs to cull the best students when they are in high school, there's no reason why you can't take advantage of their system to garner the best aid package.

For that, you will need to be more aggressive. Approach aid departments and request merit aid if your child has a special skill or a stellar academic record.

You may have to approach individual academic departments. Search online scholarship sites, such as fastweb.com.

Compare aid offers and lobby for better deals.

While your child may not get into Harvard or Yale, she can certainly get a quality education. Getting more money out of a university's fat endowment to pay for it has become an essential part of this learning process.

John F. Wasik is a Bloomberg News columnist. He can be reached at jwasik@bloomberg.net.