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Financial aid is a wide umbrella that can cover the cost of a child's education.

"Financial aids actually comes in the form of grants, scholarships and loans, also work study. They can come from federal, state, city or college sources," says Associate Dean for Enrollment Jim Murphy of the City University of New York.

Before families can start the journey toward finding funding, they have to complete an important form: the Free Application for Federal Student Aid, or FAFSA. The application can be filled out after January 1 of a student's senior year in high school.

The FASFA form can be easily filled out online, but gathering the materials for the form should be done long before one's senior year.

"The form requires that you have tax forms, Social Security numbers, any additional income, information about assets, unusual medical expenses," says Associate Provost Barbara Hall of New York University.

Once the application is submitted, the federal government determines what the family can contribute each year toward education.

Depending on income levels, families may qualify for grant money - free money that does not need to be paid back.

"At the federal level the largest program is the Pell Program, which gives students up to $5,350 a year," says Murphy.

In New York State, students may also be eligible for a TAP grant of up to $5,000.

Once students are accepted to a school, they may be offered financial packages that include work study money and merit-based scholarships. Then what's left over can be covered by student loans.

However, there may be room for students to negotiate their financial packages.

"Make sure you have a letter in hand from a competitor school that offers you a certain amount of money," says TopColleges.com educational consultant Steven Roy Goodman. "Then very politely go to school number two and say, 'I just want to point out to you that school number one offered me this and would it be possible for you to reevaluate?'" what it is that you got.

Experts say the biggest mistake parents make is assuming they will not qualify for aid. Advisors say every family should fill out the application, even if they have a six-figure income.

"The only thing you can get back that you might not like is 'Sorry, you don't qualify for aid,' but you may be pleasantly surprised," says Hall.

For step-by-step instructions on filling out the FASFA application, visit www.fafsa.ed.gov.