It’s April and your award letters from the different colleges should be coming in. This can be a very stressful and busy time for families. The weather is warming up. Your kid’s outdoor sports are in full swing. The Tigers are winning (Hey don’t laugh as I’m writing this article they are on a two- game winning streak!) With all this going on I wanted to bring a few things to your mind before you accept that award letter from the university.

>> PAST COLUMNS: What to do if you're wait-listed or rejected

It’s not unusual for me to receive four or five emails around this time from families that believe their child just received a full ride to the college of their choice. This would be a big relief for many families … would you agree? Sure it’s what we all hope for. Unfortunately there is a very big catch that many parents are not aware of. A catch that can be very costly to your family. I don’t believe that the schools purposely mislead parents but in fact many parents are misled into thinking everything on the award letter is indeed financial aid, when in fact on item can be a very risky loan for the parents. It’s my opinion parents should be coached on how much this loan can cost them before they accept it.

What is this loan you should be watching out for? Here it is: FED Parent Loan ( PLUS ). PLUS is an acronym for Parent Loan for Undergraduate Students. Pretty catchy right? There are, however, a few catches you need to be aware of with this loan. Let me explain how the loan works. First there is a 4% origination fee. Origination fees are added to the base loan amount. So you can tack on $800 to the base loan of $20,000. This would raise the loan to $20,800. My first question to you is how many loans would you normally take, if they had a 4 percent origination fee? Second it has a 10 year payback period and an interest rate of around 8.5 percent. Now before I get flooded with emails about how you might know someone with different fees and interest rates, these are average numbers. By the way with the current credit crunch we are in, it’s my opinion that these fees and rates will increase. Why? Because of regression to the mean. Simply put, if something has a historical average and if for some period of time it is different (higher or lower) than its historical average, it will trend towards that average. Make sense? In the past few years, interest rates have been lower than their historical averages so I believe the credit crunch will push rates higher. Another warning about this loan, the payment will start a few months after you get the loan.

The payment for the loan I described above is $257.89 a month. Not too horrible right? One year of tuition is covered for $257.89. The problem I see is parents have little problem handling this loan the first year and maybe the second year. But by the time the third or fourth years come, they are terrified of writing the check. By year four in the loan above we will be paying $1,031.56 a month and the interest may not be tax deductible (you will have to talk to your accountant to see if it is)?

The bottom line is be careful what you accept from the schools and know what you are signing. Each family I work with understands each and every option available to them before the award letters are even sent out.

Mike Humann is the nation's leading expert on all things related to college and careers. You can go to www.CollegePlanningCoach.com or call 1-866-210-0837, Ext. 105 to find out the date and location of his next college planning seminars.