By JILIAN MINCER
Wall Street Journal
Page D6
March 22, 2007

Families now have two more Internet tools to help them save and pay for college.

One new online tool will enable students and their families to determine more easily whether they will be eligible for federal financial aid for college. Called FAFSA4caster, it was unveiled yesterday by Secretary of Education Margaret Spellings and will be available April 1.

Earlier in the week, the College Savings Plans Network launched a new Web site to help families compare 529 college savings plans.

FAFSA4caster comes in response to recommendations made by the Commission on the Future of Higher Education. The bipartisan group had recommended streamlining the college-aid application process to help families plan for college. It also had suggested cutting in half the time it takes to apply for federal student loans, and helping students learn about their aid eligibility before their senior year of high school.

The new site, which will be available at http://www.federalstudentaid.ed.gov/, will help families determine eligibility for federal aid, how much the family will be expected to contribute to college and whether the family will be eligible for the Federal Pell Grant Program, which can provide more than $4,000 for college expenses and which doesn't have to be repaid.

FAFSA4caster should make it easier for students to file the notoriously complex application form for federal aid, known as Fafsa (the acronym for Free Application for Federal Student Aid). Researchers have estimated that 1.5 million U.S. college students who were likely eligible for federal Pell grants didn't apply for aid in 2004. About 11 million students filled out the Fafsa form in 2005-2006. Now, users of FAFSA4caster will have their information transferred to the application.

The Department of Education expects the new site to be available in Spanish on April 29. And it plans to release an updated version in September, with expanded features. For one thing, the next release would provide some case studies to help students determine how much state and college aid they could expect to receive.

Amid rising college costs, legislators have been focusing more attention on the student-aid process. On Tuesday, House lawmakers introduced a bill that aims to simplify the application form for federal financial aid for college.

The College Board has estimated that the average annual cost of tuition and fees at a four-year private college is $22,218 in 2006-2007. The estimated average cost for fees and tuition for in-state students at public institutions is $12,796.

For families interested in 529 plans, the College Savings Plans' Web site, which has been in the works for about a year, will "provide a noncommercial site" comparing different state 529 plans," said Jackie Williams, executive director of the Ohio Tuition Trust Authority and chairwoman of the College Savings Plans Network. The Web site is funded and coordinated by the College Savings Plans Network, an affiliate of the National Association of State Treasurers.

So-called 529 plans, named for the section of the Internal Revenue Service code under which they were created, are popular college-savings vehicles monitored by individual states. Investments in them can be withdrawn free of federal taxes as long as the money is spent on higher education. But plans in different states are run by different financial firms, and can have different investment options, expenses and tax ramifications. The differences can be confusing to investors.

The site recommends that investors consider their home state plan first because about 30 states provide tax and other benefits to in-state investors.

"It helps to filter plans based on things that are important to you," said Ms. Williams.