A deficit reduction bill widely expected to be passed by Congress this month would cut federal support for student financial aid by $12.7 billion over 5 years. Most of these savings would be realized by raising the interest rates on Stafford Loans and on Parent Loans for Undergraduate Students (PLUS loans).

The legislation would also increase the limits on federal loans for first- and second-year college students. Freshman would be able to borrow up to $3,500, as opposed to the current limit of $2,625. Sophomores would be able to borrow up to $4,500, as opposed to the current limit of $3,500. Loan and origination fees would also be decreased.

Another provision of the bill would create two new merit-based grant programs. One program would grant up to $750 to first-year college students and up to $1,300 to second-year college students who qualified for Pell Grants and who had completed demanding high school courses.

The other program would establish 'SMART' grants of up to $4,000 to third- and fourth-year students majoring in science, math, technology, engineering, and specified foreign languages.

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The new grant programs and the increased loan limits provided for in this bill are good news, but only up to a point. Given the tuition costs already in place at many schools, and the fact that tuition is still going up at many institutions, these funds may not make much difference in many students' financial situation. College students will have to count more and more on their own resources to fund their educations.

One resource that is open to everyone, regardless of their financial situation, is careful college planning. Earlier generations of students could use their college years to experiment with different courses and majors, and take extra time to get their degrees, without suffering much financial penalty. That's not the case for today's students. If you want to try out different courses, see if you can do so at a lower-cost community college or through an adult education program before committing to a full-tuition college class. Think twice about transferring to another school if it would mean losing a semester's worth of credits. And if you're so unhappy at school that you're doing poorly in your classes, take a semester off to re-think what you want to do with your life. There is little point to staying in a program if your transcript shows a string of Ds.

You shouldn't let financial worries keep you from exploring a degree or career option that you think might be your life's calling, or from leaving a situation that detrimental to your physical or mental health. Keep in mind, though, that every $1 you have to borrow to complete your education can represent as much as $2.50 in school debt you will have to repay – and, with today's tuition rates, those $1 costs pile up quickly.