Many families fail to get all the financial aid for which they are eligible simply because of myths and misconceptions about financial aid. These lead a family to believe that they do not qualify for financial aid, or send them searching for some arcane scholarship. As a result, they spend time chasing myths rather than focusing on the main sources of financial aid: Uncle Sam, their home state, their college, and their employer.

This could not be further from the truth. If you made too much money, you probably wouldn't need, want, or consider financial aid. However, most people do need financial aid to supplement the family budget for higher education. The fact is that the major factor in determining financial need is the actual cost of education for all family members. While family income and assets are factors, so are family living expenses, future retirement needs, and the current costs to educate family members.

Most need-based aid is in the form of student or parent loans. However, these loans do offer considerable financial advantages over other forms of borrowing. They usually have lower interest rates, and the interest may be deferred while the student is in school. That's free money; and repayment terms are usually more generous than those of other loans. Some loans may also be "forgiven" if the student performs certain community service jobs upon graduation, such as teaching in a deprived area. Check the college financial aid office to learn more about these favorable provisions.

Need-based aid may include grants and scholarships. These are free money that does not have to be repaid. However, the student may be required to maintain certain academic grade-point levels. Grants and scholarships are awarded on a first-come, first-served basis, so it pays to apply for these early.

Students with financial need may also be able to get guaranteed work on or near the campus through the "work-study" program. These jobs may not be available to students who do not qualify for need-based aid. Akin to this are the military ROTC and reserves programs. For those inclined to serve in the military upon graduation, there are substantial financial benefits to signing up and having the government subsidize their education.

You will need the information from an IRS 1040 form to complete most financial aid forms, so gather that information in December. However, you may complete a financial aid form based on estimated tax information. Most colleges require the forms to be sent in no sooner than January 1, but by April, most of the grants and scholarships are gone. It is okay to file an "estimated" financial aid form; you will have an opportunity to amend it later.

If you do not prepare your own income tax returns, many tax professionals will be happy to help you prepare an estimate for financial aid applications.

Many people ask about the fortune in unclaimed scholarships that, they read, go to waste each year. It is true that some money does go unclaimed every year, but the basis for these extraordinary figures is primarily unused employee tuition remission benefits, not miscellaneous scholarships for which people have not applied. Before hiring a scholarship search firm, check out the education benefits offered by your employer or union.

For many people, looking for college money turns into a search for special scholarships; students are supposed to get these awards because they were born under a full moon and have a beauty mark below their left kneecap. Families should not stop looking for these awards; they should just make them their last priority. Remember, there is more money in being an informed consumer and taking charge of the financial aid process than in all the scholarship searches ever conducted!

Many computerized scholarship search firms have gone bankrupt or are under federal investigation for deceptive trade practices or mail fraud. The reason is simple: their ads are full of empty promises. For a fee, they guarantee to find five awards for which the student is eligible. What they don't tell you is that this information is frequently outdated or inappropriate, or that it is information the family could get free from Uncle Sam.

If your education budget is tight, don't spend hundreds of dollars on searches you can perform free on your home computer, in the public library, or in the high school guidance office. If the time and effort spent on these endeavors were applied to a minimum wage job, the student would have more money to spend on education than he or she is likely to get from the search.

As you plan for higher education, you should seek out all financial resources available. Don't assume you won't qualify for financial aid. It only takes a few moments to complete the financial aid forms. It is important, however, to complete and send them in early. You can test your eligibility for free, as well as check out admission requirements and scholarships, on the College Board Website: www.collegeboard.com.