There are deadlines with respect to FAFSA so make sure this is completed first. http://www.fafsa.ed.gov
Next you need to determine what loans you are going to apply for.
Most common loan is going to be the Stafford Loan. This allows you to borrow 3500 Freshaman year 4500 sophmore year and 5500 as a junior and senior.
It will come as either subsidized meaning the government is paying the interest on the loan while the student is in school and up until 6 months after she graduates or falls below half time / unsubsidized meaning the intersts accrues from the time the loan is disbursed or some combination of the 2.
The current interest rate is 6.8% fixed paid back 6 months after graduation on a 10 year loan with no prepayment penalties for paying this off early.
You won’t find a lot of variation with respect to lenders because they are in essence simply administering the program. If your student is in the state of California you may want to look at a non profit lender as the goverment cut them a break on subsidies that are paid on the loan and sometime they will be able to provide discounts off the federal rate for setting up an auto payment.
Next type of federal loan that you should look at would be a Parent Plus Loan. These loans are unsubsidized loasn taken out in the parents name. They become payable about 60 days after full disbursement(usually this occurs on January 2 semester school year). They carry a fixed rate of 8.5 and are paid back over a 10 year period. They carry a couple of benefits as do the Stafford loan. They are forgivable in the event of death or disability of parent or student, you have the ability of forbearing the loan(interst does accrue so be aware of this) for up to 4 year with hurting your credit and they can be consolidated and paymetns can be extended for up to a 30 year period again with no pre pay.
On suggestion is that if you think the student can get by on 10500 dollars of federal money apply for the PLUS loan with incorrect information. This will trigger a review of your application and if you do not respond to the lender it will trigger a decline letter. Have the lender send the decline letter to the school and they can then certify the stafford loan as an independent student increasing the amount from 5500 to 10500.
Last type of loan is a private student loan. I am not such a big fan so I am not going to even discuss the benefits.
2 thing that I notice from you post is that I will bring to your attention. First you discuss the school not taking bills into the equsion. This is true but they also do not account for home value in the assests equasion so technically you could take a sizable amount of your saving (which does count against you with respect to your EFC) and use it to pay down your home. Open up a HELOC in advance so that you still have access to the capital in the event of an emergency. Additionally max out your 401K, flex spending accounts or if you are self employed consider the SEP or Simple as a way of minimizing reportaed income. Bottom line is that there are things you can do to help yourself.
Lastly you mentioned that your daughter is going the route of healthcare. If she is going into nursing the Federal Student Loans hse takes out can be portentially forgive. check out http://www.mappingyourfuture.org and then look into loan forgivenes programs. There are certainly some stiipulations such as working at a VA type institution but in either even you should be aware of your options.
I am not a huge fan of HELOC ing your home when these federal loan programs are available but with rates as low as they are right now I certainly might split the difference.
My strategy would be to get the student the 55oo and try to get declined for the additional 5000. That gives the student 10500 a year or 21000 for remaining 2 years. Very manageable amount of debt coming out of school. I would then consider using the HELOC to cover this years tuition and take a wait and see approach for next year.
