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This post originally appeared on LearnVest.
Paying for college can be a nerve-wracking rite of passage. Not only are you probably dealing with huge sums of money, but the complex process of making decisions about loans is often trusted to 17-year-olds, who may or may not have ever managed money before.

Add to that the confusion that even parents feel when faced with the math and subtle nuances of covering the high costs of college, and it's a journey that's ripe for potential errors.

Since we're big proponents of proper financial planning, we consulted pros in the field of financial aid to find out some of the misconceptions, myths and mistakes that students and parents can make when trying to pay for college. And then we helped set the record straight.
1. Every college applicant should fill out the FAFSA. And you should do it every year.
The FAFSA (Free Application for Federal Student Aid) is akin to a golden ticket. It's what the federal government and schools use to decide how much to give or loan to a college-bound student. You should fill it out--even if you think that you won't qualify for any money.

RELATED: Millions Miss Out on College Aid

"I often hear from families who apply for financial aid the first year that their eldest child goes to college. They don't get anything other than low-cost loans, so the second year, they may say, 'Why bother?' " says Mark Kantrowitz, senior vice president of edvisors.com and the author of " Filing the FAFSA." "But the financial aid formulas are very complicated, so there are very subtle things that can change from one year to the next that can have an impact on aid eligibility."

Maybe your second child is heading to college while your first kid is still in school or maybe your income changed. Or it's possible that the colleges your second child is applying to are more expensive. All of these things could mean that your younger child receives more grant and scholarship money.

Bottom line: Fill it out every year that you have a child attending college. (Here's more on how to fill out the FAFSA.) You have nothing to lose and potentially a lot to gain.
2. The earlier you send in your FAFSA, the better.
The form usually comes out on the 2nd or 3rd of January each year, and that's precisely when you should consider filling it out, so you can potentially get to the front of the line for nabbing a piece of the financial aid pie.

Why, you ask?

It's simple: There's generally more money to give away at the start of the financial aid application season. "So you need to be organized," says Damian Rothermel, a CFP® who specializes in college funding. "If you're not in the front of the line, you typically have to be a better prospective student to get the same amount of money."

RELATED: 10 Ways to Reduce Those Steep College Costs

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9 Things We Bet You Didn't Know About College Financial Aid

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This post originally appeared on LearnVest. Paying for college can be a nerve-wracking rite of passage. Not only are you probably dealing with huge sums of money, but the complex process of making decisions about loans is often trusted to 17-year-olds, who may or may not have ever managed money before.

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LOS ANGELES (Reuters) - Families receiving college financial aid offers this spring should beware: what they see this year may not be what they get next year.

Some colleges make their most generous offers to high school seniors as a lure to attend, a practice known as "front-loading."

But those returning for their sophomore and subsequent years at university may get thousands of dollars less in grants and scholarships than they did as freshmen. Often, the free money is replaced by student loans.

About half of all colleges front-load their grants, according to financial aid expert Mark Kantrowitz, who analyzed data from the National Center for Education Statistic's Integrated Postsecondary Education Data System.

"Colleges practice front-loading because it is cheaper to have higher grants during the first year, when it affects enrollment, than during all four years," said Kantrowitz, publisher of Edvisors.com, an education resource site. "Effectively, it is a form of bait and switch."

College administrators, however, balk at that label and at the idea that front-loading is common.

Most colleges try to offer consistent aid packages throughout a student's career, and there are numerous reasons why grant aid may drop when first-year aid packages are compared to those offered to returning students, said Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators.

"Higher education is subsidized by so many different sources, and those are constantly changing," Draeger said.

Grants may be reduced because of institutional factors, such as changing revenue or state funding, as well as individual factors, such as students taking fewer credits or failing to keep up a certain grade point average, Draeger said.

Some schools want to limit debt for freshmen, who are more likely than returning students to drop out. Also, limits on federal student loans are lowest for first-year undergraduates: $5,500, compared to $6,500 for second-year undergraduates and $7,500 for those in their third year or beyond.

"Schools will stuff more loans into the package as a rule because the federal direct loan (limit) goes up each year," said Lynn O'Shaughnessy, author of "The College Solution," and a college consultant. "Also, schools don't increase merit awards as their prices go up each year."

The drop in grant aid is particularly steep at private schools. Returning students at private, nonprofit colleges in 2012-13 averaged $2,842 less in grant aid than first-year students, according to The Chronicle of Higher Education, which used IPED data. The average drop-off was less severe for returning students at public colleges: $815.

Overall, the average net price for returning students - what families actually pay after grants and scholarships are deducted - is $1,400 higher than for first-year students, according to Kantrowitz's analysis of National Postsecondary Student Aid Study numbers.

Colleges also do not advertise that they practice front-loading, which cannot be detected by using the net price calculators embedded into college websites. The calculators estimate only the first year's cost of college after expected grants and scholarships are deducted.

Loans are not considered by the calculators since they increase rather than decrease the cost of education.

Only a handful of colleges offer four-year commitments to prospective students that their financial aid won't drop, Draeger said.

Northeastern University is one of them. The Boston institution not only promises grant and scholarship aid won't drop, but that this free aid will increase at the same rate that tuition increases.

The university's grant aid appears to fall when freshmen are compared to undergraduates overall, but school officials say that is because the school follows a cooperative education model that starts in the sophomore year, alternating classroom studies with six months of full-time work in career-related jobs.

Although guarantees are not common, Draeger said colleges have an ethical obligation to be clear in their financial aid offers which grants are renewable and under what circumstances.

When financial aid offers do not provide this information, families need to ask questions, said Martha Savery, Massachusetts Education Financing Authority and a former financial aid director for Harvard Graduate School of Education.

"Families need to ask, 'If all things remain the same, can I expect the same type of aid (in subsequent years,)'"? Savery said. "Being a good, educated consumer is part of the process."

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College freshmen need to beware of bait-and-switch aid offers

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LOS ANGELES (Reuters) - Families receiving college financial aid offers this spring should beware: what they see this year may not be what they get next year. Some colleges make their most generous offers to high school seniors as a lure to attend, a practice known as "front-loading."

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If you didn't see my college blog post from yesterday, I'd urge you to take a peek. I wrote about misleading financial aid awards, which can cause parents to think that a school is going to be more affordable than it really is.

Here is the post:

Today I want to offer three more examples that I'm pulling from a National College Advocacy Group webinar that my friend Paula Bishop, a CPA and financial aid expert in Bellevue, WA, conducted.

University of Portland

The first letter that I'm sharing comes from the University of Portland in Oregon.

Just like the award letter from George Washington University that I showed you yesterday, the University of Portland unfortunately included non-need-based-aid loans in its financial aid package. The only loan that should be in this package is the subsidized Stafford, but not the Parent PLUS and unsubsidized Stafford (Yesterday's college blog post explains why.)

When you eliminate the those two loans, the aid package drops from $47,460 to $25,600. The family's Expected Family Contribution is $16,638, which is the figure, generated by the financial aid formula, that is supposed to represent what the family should be able to afford to pay for one year at this Catholic university. The school's cost of attendance (COA) is $47,460.

When Bishop crunched the numbers, this is what she discovered:

So is the Portland offer a good award? Obviously, parents would prefer an award that meets 100% of student's needs, but only the most elite schools can offer that. When I looked on the College Board to see what the average University of Portland award contained, I discovered that the school's typical award meets 74% of a student's need so this package is better than average for this school.

Fordham University

The next award letter came from Fordham University and was sent to a prospective transfer student. Considering that one in three students transfer to another school, I thought it was it important to share this one.

The Fordham letter was stunning in what it failed to include. Can you figure out what's missing?

What Fordham Missed

Fordham failed to include room and board charges. Transfer students, Bishop explained, don't live on campus but clearly an estimate of what it costs to live in New York was needed! The cost could be staggering. Fordham low balled this young woman, who ended up not attending this Catholic school.

Columbia University

My last example comes from Columbia University. What do you think about this award letter?

Columbia Gets an "A"

This is actually an award letter that gets it right. The award letter helpfully breaks down the cost of attendance. It also includes what the parental and student contribution will be based on the financial aid formula. Finally Columbia provides how it will address the family's need. Beyond the clarity, Columbia meets 100% of the family's need, which only the wealthiest schools can pull off.

Bottom Line:

It's important to be able to fully understand what a college is proposing when you receive a financial aid award letter. If the document is confusing, call the school's financial aid office and stay on the line until you understand. Too much is at stake to just guess.
Order a copy of the new edition of The College Solution You can now pre-order the second edition of The College Solution: A Guide for Everyone Looking for the Right School at the Right Price. The second edition contains about 90% new content including chapters on evaluating schools financially and academically.

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Are These Financial Aid Letters Misleading?

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If you didn't see my college blog post from yesterday, I'd urge you to take a peek. I wrote about misleading financial aid awards, which can cause parents to think that a school is going to be more affordable than it really is.

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Accepted Student
400 Heath Street
Chestnut Hill, MA 02467

Dear Student:

Congratulations on your acceptance to Pine Manor College! We are pleased to offer you the following financial assistance for the 2010-2011 academic year based on your status as a full-time student living On Campus.

These awards are contingent on the accuracy of the information you provided to the College. The aid package is subject to change if: (a) you receive additional outside resources; (b) there is a change in the family's income; (c) incorrect information was provided; (d) there is a change in your enrollment or housing status; and/or (e) you fail to submit all required paperwork. Withdrawal from the College, disciplinary action, or failure to maintain minimum academic standards are cause for adjustments or cancellation of any or all awards.

Subtract the total financial assistance awarded, excluding Work-Study, from your costs to determine your projected balance due for the year. (Please note: Work-Study funds may NOT be credited to the student's account as students are paid directly on a biweekly basis).

To accept and secure your financial aid award, please complete the enclosed reservation agreement within three weeks of the date of this letter.

Be sure to set up your one-on-one counseling appointment with Sophia Henderson by phone at 617-731-7121 or email henderss@pmc.edu to discuss your exciting future at Pine Manor College!

If you have any questions regarding your financial aid award package, or would like to learn of our financing options, please call the Financial Aid Office at 617-731-7129.

Sincerely,

Jennifer J Roberts
Senior Associate Director
Student Financial Services

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Pine Manor is a small, private four-year liberal arts college. Its historic campus, situated on 50 wooded acres in the Chestnut Hill section of Brookline, MA, is only a few miles outside of Boston. For over 100 years Pine Manor has provided a highly student-focused education and tailored mentoring grounded in the Liberal Arts tradition.