College costs keep climbing
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The bottom line is that we can plan for it or we can wing it. If we wing it, we'll have to use our current funds or income to pay for college. Or worse, our children may have to borrow funds, and we may find ourselves borrowing, too. Better to save as much as possible in advance and then be pleasantly surprised if our genius gets ample scholarship funds.

Here's what we can do:

• Hire help. • Save. • Compare. • Borrow smartly. • Get private loans as a last resort. • Go beyond rankings. • Assess community college.

Hire help. A financial planner can help you divert those discretionary dollars into a tax-favorable college savings plan such as a Coverdell education savings account or 529 plan.

Save. Even if you have just one or two years to go before your student leaves for school, you have time to set aside funds. "Parents can look at their spending plan and identify areas where they can reduce their costs so that some of that money can be allocated to paying for college," says Fox. "With the proper planning they should be able to knock a good full-year's cost of college off their out-of-pocket expenses, so that can be very significant."

Compare. When it comes time to apply, match the student's profile with colleges that are searching for his or her type. Apply at a few schools and play them off one another to negotiate the best financial aid package for your student. Of course, your student will have to bring attractive qualities to the table, such as a high grade point average, great SAT scores or stunning athletic prowess.

Borrow smartly. If students must resort to taking out loans, first take advantage of the federal loan programs -- the Stafford, Perkins and Plus loans. Shop beyond those on the school's preferred lenders list. Private lenders that contract with the government to offer federal loans sometimes charge less than the going rate to get the business -- as much as 2.5 percentage points less, says Fox. The only way to access federal loans is to fill out a FAFSA.

Get private loans as a last resort. Students are relying more heavily on them, even though they're generally a good deal only for lenders. Bankrate surveys private college lenders, and you can see the current average rate on the College Finance channel. The Economic Diversity of Colleges Web site is another great college research tool for parents, put out by The Institute for College Access and Success.

Go beyond rankings. Plenty of excellent schools don't make the top rankings. And don't assume that the most expensive ones are the best. "Price has nothing to do with quality of education," says Fox. Public universities as a rule cost less than private schools. In fact, according to a recent Wall Street Journal study of CEOs heading the 50 biggest companies (in revenues), more than half graduated from public schools.

Assess community college. Don't turn your nose up at the community college system either. It's an economical way to get an education. No one cares where students spent their freshman and sophomore years. The CEO of Accenture went to Dean College, a community college near Boston, and from there moved on to Babson College to get his bachelor's and M.B.A. degrees.

You've heard the serenity prayer often enough to understand that control can be elusive. While we can't control college costs, we can control how we pay for it -- but only if we plan for it.

Longtime financial journalist Barbara Mlotek Whelehan earned a certificate of specialization in financial planning. If you have a comment or suggestion about this column, write to Boomer Bucks.