Playing Your Cards Right

The research is clear: Going to college is the best path to a fulfilling career and middle-class life. But recent headlines are raising concerns that some colleges and corporations are taking advantage of the booming demand for higher education to turn students into suckers.

(Jon Keegan for USN&WR)

Consider: Prosecutors have alleged that financial aid officials took kickbacks to steer students to unnecessarily expensive loans. Other colleges are under investigation for doing the same thing with study-abroad programs. Even the dramatic rise in textbook prices—which now set students back almost $1,000 a year on average—has drawn suspicion. And although Congress just passed a 25 percent boost in grants to needy students by 2012, sticker prices are so high that even a degree from a no-name state college could run many of today's freshmen $100,000.

Just 25 years ago, financing college was as simple and low-pressure as a game of Go Fish—merely a matter of finding a match and persevering. Today, it's more like high-stakes Texas hold 'em. Indeed, the stakes of this college poker game couldn't be much higher. Students who play their cards right and make it through to a bachelor's degree earn, on average, about $1 million more over their lifetimes than those who never even try college.

So what is anyone gearing up to finance a college education to do? Well, no jackpot that valuable is won easily. It takes sacrifice, clever planning, and hard work. But as the stories that follow show, students and parents who are getting tough and smart are winning the new college finance game. They are earning valuable degrees without too much financial pain.

Students are not only intensifying their studies but sacrificing weekends and evenings to college research and scholarship strategizing. They're learning to calculate their financial aid odds as cunningly as any Las Vegas pro and squeezing colleges to raise the scholarship bidding. Students are searching out campus jobs that pay well and kick-start careers. They're also finding great new ways, such as cheap co-op housing, to cut their costs.

Parents are building up their college bankrolls by turbocharging savings. And while Congress reshapes college lending in response to this year's scandals, students and parents are figuring out new ways to find and negotiate the best loan terms .

Taking charge. Phoebe Rounds, who graduated from Yale in June, is in the vanguard of these new financially savvy students. Because her father is a public school teacher and her mother worked part time, Rounds needed lots of financial aid. So she used the competition among colleges for bright students to pry thousands of dollars in extra grants out of Yale.

Her system worked so well that, to the displeasure of financial aid officers around the country, she helped organize a student group that started writing letters and giving presentations to high schoolers about how they, too, could "leverage" more aid out of colleges of all sorts—not just the Ivy League. "This is something that saves people thousands of dollars. They need to know they have the option," she says. Rounds says the principle of leverage is simple and universal. "It is just a question of making sure you are in charge of the process."

Of course, that doesn't mean high schoolers can bluff their way to scholarships. As any good poker player knows, it helps to have an ace in the hole.