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To What Degree?

Some parents start saving for college before their child is born. But let's face it, that's not most of us. Even if you have a high schooler and haven't planned ahead, there are ways to survive sticker shock and pay Junior's college bill. For the 2005-2006 academic year, the average cost of tuition plus fees, room, and board was $12,127 for a public school and $29,026 for a private one. Ouch. The good news? Few have to pay the full bill. Scholarships and grants — otherwise known as "free money" — come from many sources. And, while you might save at state or community colleges, you can find deals at top private schools. 'sometimes the schools that are the most expensive are also the most generous, says Rob Franek of "The Princeton Review," which publishes America's Best Value Colleges. For example, Bates College in Maine costs more than $40,000 a year but offers freshmen a needs-based aid package of $24,000 — before student loans. However, despite the relief free money and last-minute loans provide, you still need to save as your children grow. Which strategies suit you best depends on how old your kids are.

Infant/Preschool: Long-term compounding of investments is generally your best strategy. Put money aside monthly through automatic payroll deductions. It's too easy to spend savings when your child's freshman year seems far off. And think about early contributions to the popular college savings plans described below. Any baby gifts of cash you receive could go right into these accounts.

Finance Columnist Liz Pulliam Weston recommends loan payments should not exceed 10 percent of the expected monthly gross income in the student's field — a good guideline once your child declares a major. By that rule, an education major that lands a teaching job paying $30,000 per year has a monthly gross income of $2,500 and should generally keep maximum student loan payments around $250 a month. How much to borrow? While student loans are a low-cost way to fund tuition and ensure your children do their part, they can saddle them with so much debt that they are mortgaging their future. If applying for federal aid, you must fill out the Free Application for Federal Student Aid. It's easiest to complete the form online at fafsa.ed.gov.

Give and TakeA USAA-sponsored 2005 study, "Freshman Finance 101," found that 79 percent of college-bound freshmen had not received any budgeting or financial advice from their parents or anyone else. And once students get there, most schools make it easy to run up bills with swipe-and-go systems tied to student IDs or prepaid spending cards. The cashless campus is convenient, but experts say that never having to pay cash makes students much worse at budgeting. Robin Raskin, author of "Parents' Guide to College Life" and mother of three, put her son on a budget. "We finally got smart, but he has a thousand reasons why he always runs out of money," she says. "You have to decide whether to stick to your guns. It can be really hard when they are starving." Her research has shown that many students unknowingly spend a fortune on high-priced coffees and fruit smoothies, since they never see the bills.

Payment MethodsGive them some credit — or should you? "Kids are besieged with special credit card offers on campus," warns college parenting expert Robin Raskin. "Some students end up with 10 cards all maxed out. About 50 percent of incoming freshman have a credit card; 96 percent of graduating seniors have at least one." A family card lets parents see expenses and makes sure bills are paid on time. But a student's own card can help him or her build a good — or bad — credit history. If your child goes solo, get a card with a preset low limit, help set payment schedules, and have a frank discussion about debt and interest rates.

Crunching NumbersUse an online calculator, like the one at usaa.com, to figure future college costs based on your child's age.

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