by Katy Hopkins

Get a new year of college savings off to a good start

If one of your New Year's resolutions is to find more money for college, here are six steps you can take to reduce the financial pain of higher education:

1. File your FAFSA:

The new Free Application for Federal Student Aid (FAFSA) application became available January 1 -- and for the first time this year, filling it out is mandatory for anyone applying for a Federal Parent PLUS Loan. Although financial aid officers usually urge students and parents to fill out the form as early as possible, it might pay to wait until February this year.

Starting January 31, users will be able to electronically import their Internal Revenue Service tax data into the FAFSA form. (Keep in mind that you'll have to wait up to three weeks after e-filing 2010 tax data to the IRS before it can appear on your 2011-12 FAFSA application.) Using the automated data can save families time while still allowing them to submit FAFSA applications "plenty early" for state and school deadlines, says former financial aid officer and College Karma consultant Ann Playe.

2. Contact your financial aid office:

If you think the information on your FAFSA form does not accurately reflect your current economic status, don't be afraid to alert your school's financial aid officers about extenuating circumstances, says Justin Draeger, president of the National Association of Student Financial Aid Administrators. The 2011-12 FAFSA determines your need for aid based on your financial situation in 2010. But if a parent lost their job recently and saw a dramatic decrease in income, or if a family member had big medical expenses (which aren't reported on the FAFSA), among other situations, schools are permitted to adjust your eligibility for financial aid.

Reach out to your school's financial aid office early with a letter or E-mail that specifically outlines and documents your unusual expenses or drop in income, College Karma's Playe recommends. Students and parents can also appeal to the financial aid office after receiving their aid package.

3. Collect a "tax scholarship":

Students and families can get several kinds of tax breaks for their educational expenses. Low- and middle-income families can collect American Opportunity tax credits (AOTC) of up to $2,500, for example. The AOTC is attractive because even families who don't owe a cent in taxes can still get checks of up to $1,000 from Uncle Sam.

Taxpayers who plan to try for another tax deduction, the Higher Education Tuition and Fees Deduction, should wait until February to file taxes, since the IRS says it needs to program the new deductions into its systems. Students and parents who wish to fill out the FAFSA before filing their 2010 1040s can submit estimates on their FAFSAs, select the "taxes not filed" choice, and update the form after filing taxes.

4. Get a late-deadline scholarship:

Though the due dates for many hefty merit-based scholarships have passed, surf the web and around your community for any remaining opportunities. Sites like match a student's profile against a database of scholarships and only consider applications that are still available. It's not too late for the high school senior just beginning to think about scholarships, but "they shouldn't just sit on their hands now," Playe from College Karma says. "They should get online and see what's out there."

5. Be realistic:

"Parents have to be much more conservative in terms of what they're telling their kids they can finance for college," says Zac Bissonnette, author of Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents

6. Start saving -- now:

Even for parents of teenagers, it's not too late to start squirrelling away some future funds. "They should save for college even this late in the game," says Mark Kantrowitz, the publisher of and "Every dollar they save is a dollar less they have to borrow." One comparatively quick and painless way to kick-start college savings: take advantage of credit card and marketing offers of free bonuses deposited in 529 college savings accounts.

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Resolutions That Could Lower Your College Tuition