Some students choose a college based on academics, career aspirations, the institution’s reputation, quality of faculty, location, student body and athletic facilities. But the 2010 College Decision Impact Survey financed by Fast Web, a scholarship-matching engine owned by Monster Worldwide and Maguire Associates, an education consulting firm based in Concord, Mass., reveals that money is an increasingly important factor impacting college choice. Indeed, two-thirds of the 800 students surveyed online, about a third of whom are minority, said that family economics influenced their college selection.

Because many Latino students are the first-generation in their family to apply to college, their parents can’t offer much help with completing complicated financial aid forms and college applications, explained Alejandra Rincón, vice president of programs at the Hispanic Scholarship Fund (HSF) based in San Francisco, Calif. Indeed many Latino students are surprised to learn that they can apply for FAFSA (Free Application for Federal Student Aid), compete for grants and scholarships and don’t have to take out loans to finance their entire college education.

When affordability impacts college choice,graduation rates decline, Kantrowitz said. More students are gravitating to community colleges because they’re less expensive than four-year colleges. Students who begin higher education in community college earn a bachelor’s degree at a rate 14.5 percent less than students who begin in four-year colleges. American higher education“is moving in the wrong direction. We should be increasing the number of bachelor’s degrees,not decreasing them,” he said.

Because community colleges are cost effective and money is playing a greater role, Rincón noted that about two-thirds of Latinos begin higher education at junior colleges. Though most two-year colleges offer remedial education,liberal arts courses and increasingly specialized and technical programs, Rincón said that most students who start there fail to earn an associate degree or a bachelor’s degree. She urges students to make sure to take credit-bearing classes that will transfer to a four-year college.

Despite the economic recession, most students have not opted to take a year or two off,save money and then attend college, the survey noted. Both Kantrowitz and Rincón say that starting college immediately is the best route to take.“Data show that students who delay don’t return to college. They start earning money and think they don’t have to earn an associate degree. They don’t think long-term,” explained Rincón. Kantrowitz adds that students who take a year off get out of the habit of studying and can lose their academic drive.

Moreover, lower-income and minority students are opting in greater numbers to attend state colleges to trim costs. The survey revealed that 71 percent of Latino students were pursuing state colleges, and 62 percent of Caucasians.

But state college fees are rising. Kantrowitz warns that many state colleges, which have been a major destination for many minorities, are increasing tuition and other fees due to state budgetary woes. Tuition is rising at double-digit increases, including state colleges in California,where tuition will spike 32 percent; Florida, 15percent; and Arizona, about 10 percent. In are cession, state income tax revenue decreases,higher education budgets are cut, and the only discretionary item left is raising tuition.

Even before the financial crisis, many Latino students were living at home and attending college in proximity to where they reside. Rincón notes that frequently private colleges located far from home are the schools that offer the most scholar-ships and financial aid, which can make college more affordable than staying close to home.

Having fewer Latino and minority students attend private colleges is contributing to lowering minority graduation rates, Kantrowitz assert-ed. Private colleges have higher graduation rates because they often have smaller student-faculty ratios and provide more counseling and supportive services than larger public and state colleges. One reason why private colleges are more expensive, he says, is the cost of additional faculty, facilities and services offered. Kantrowitz added that private colleges are wooing lower-income students by increasing the number of need-based financial aid scholarships.

Understanding the Net Cost of a College Education

Students are increasingly paying attention to the net cost of a college education. Kantrowitz defines net cost as the actual price of tuition, room and board, and books after subtracting money derived from grants and scholarships. If the college costs $20,000 annually, including room, board and books, and a student received$8,000 in need-based aid from the college,$4,000 from Pell Grants and $1,000 in an additional scholarship, the net cost would be $7,000,which the family or student would need to provide from savings or by taking out loans.

Recognizing that lower-income students are being closed out of private colleges by rising college costs, 6,000 colleges have adopted no-loan financial aid, replacing loans with college-financed grants. But Kantrowitz said that this approach has not resulted in attracting more low-income and working-class students. Since colleges haven’t established specified admission policies for lower-income students, the number of students applying for these loans has risen dramatically and more middle-class students are earning them, not low-income students. The only way to boost the number of minority students would be to develop criteria that offer certain advantages to lower-income students.

Because of rising college costs, more students are applying for need-based financial aid. Some colleges offer aid primarily to the neediest students while others spread their financial aid among all students who meet the criteria.

For-profit colleges such as the University of Phoenix are showing an increase in minority enrollment because these schools are afford-able, have open admissions policies and help students gain federal loans. Some for-profit colleges have been criticized, however, for accepting students who aren’t equipped to repay their college loan. “It’s not clear whether for-profit colleges are serving the underserved population or exploiting it,” Kantrowitz said.

Because of the economic slowdown, a greater number of students are applying to the Hispanic Scholarship Fund (HSF) for financial aid. Of HSF’s total funding, $21 million stems from the Gates Millennium Scholars program.Eligible students are Latino residents or citizens with a 3.3 GPA who meet federal income guide-lines. The average scholarship offers $12,000 a year and covers undergraduate education, but also finances master’s and doctoral programs in the following disciplines – science, math, engineering, computer science education, library science, public health. The other HSF scholar-ships provide $7 million in funding for Latino residents or citizens with a 3.0 GPA, based on their writing three essays and attending an accredited university. Last year, 3,000 scholar-ships were awarded, averaging $2,500 a year.

What are Kantrowitz’s best tips for minority students who want to be accepted into the college of their choice?

1) Submit the free application for federal student aid. Last year, 2.3 million students who would have qualified for Pell Grants didn’t apply.

2) If you need to borrow money for college,look for federal loans first. They are less expen-sive than bank loans.

3) Consider joining AmeriCorps, which provides $5,500 maximum (same as Pell Grants) in scholarship money annually for volunteers.

4) Apply for the Hope Scholarship TaxCredit, which provides up to $2,500 in tax credit based on a percentage of tuition and fees, of which $1000 is refundable.

5) Start saving $100 a month for 10 years at 6 percent or more interest, and that will ease the need to borrow.

Financial aid websites can help students obtain the $3.5 billion in scholarship money that was awarded in 2009. Students who use Fastweb.com, for example, fill out a questionnaire, which takes about a half-hour to complete.Based on a student’s data, the site recommends the best scholarships to apply for. Because of there cession, scholarship money is more competitive than ever, but students who don’t apply are“leaving money on the table,” Kantrowitz said.

HSF’s Rincón offers six tips for Latino students interested in applying to college:

1) Start early, during freshman or sophomore years, to research colleges and financial aid. Do not wait until senior year when the dead-lines approach, which is far too late.

2) Challenge yourself academically in high school, which increases your chances of gaining college acceptance. Take algebra, advanced math and Advanced Placement (AP) classes.

3) Apply to at least four colleges, including one state and one private, and see how much scholarship money the private college offers.

4) If you need to take out loans, keep them to a minimum. Some students take out excessive loans, beyond what college costs are, and end up having to pay too much money back.

5) Reach out to the Hispanic College Fund, MALDEF and Tomás Rivera Policy Institute, which has listings of scholarships offered to Latinos.

6) Even after gaining acceptance to college and starting as a freshman, continue to apply for scholarships. Scholarships are awarded to students in college as sophomores and juniors, so the persistent students gain the financial aid.

Choosing the best college for the right price depends on how much a family needs to borrow. Kantrowitz considers borrowing $10,000 a year as the maximum. “If you need to borrow more than that, consider another college,” he said.Strapping a graduating student with $40,000 to$50,000 or more over four years in college debts requires many students to repay the loan over 30years, which means considerable extra interest.

Mark C. Taylor, author of Crisis on Campus: A Bold Plan for Reforming Our Colleges and Universities, noted in a New York Times Op-Ed piece that, if recent trends continue, the price of a four-year education at a top-tier college will spike to $330,000 in 2020. He noted that “financial aid is drying up and government support is not keeping pace with the rising cost of college; students and parents are being forced to borrow more heavily.” Kantrowitz said college costs are rising at about 6 percent to 8 percent a year, but Pell Grantshave not risen appreciably in the last few years.

Economic concerns should not prevent Latino or other students from attending college, Rincón suggested. Colleges “open up so many opportunities in life. You’ll make more money, but it also affords first-generation Latinos the life their parents dreamed of for them. It enriches your life,and you’ll lead a better life for it,” she said.