college
9 ways to save for college in 2009

4. Make college savings a family affair 
A great way to boost your child's college savings account is to invite your family and friends to direct their holiday and birthday gift money into your 529 plan. A number of 529 plans and online registries are not only promoting the idea, they also are making the process easy with gift coupons.

For example, Upromise Investments has launched a feature called "Ugift" in nine of the 529 plans it manages (in seven states). Anyone with an account in a participating Upromise-managed 529 plan can invite donors to contribute directly to the 529 account by returning a coupon along with a check.

Another alternative is a free online registry called Freshman Fund that accepts third-party contributions by check or credit card and transmits the money to any 529 plan the parent decides to use. Or simply visit your 529 plan's Web site and look for its special friends and family gifting promotions.

5. Look for free college money 
According to the College Board, the average private-college undergraduate received more than $7,400 in institutional grants for the 2006-07 school year, while the average full-time undergraduate at public colleges and universities received more than $1,000. A significant portion of this money went to students without regard to their financial need.

When it comes time to choose a college, find out which schools will pay for your child's stellar high school grades, challenging course selections, unique backgrounds or interests, or musical or sports prowess.

Also, remember that private organizations dole out more than $3 billion in scholarships each year. Begin your scholarship search by checking with the guidance department at your child's school. Free online scholarship search engines also will turn up some opportunities -- just be sure you are comfortable with how your personal information is used.

6. Plan ahead for financial aid 
Demonstrating financial "need" through the FAFSA application process becomes more important as interest rates continue to drop on subsidized Stafford Loans. Steps you take now can enhance your child's financial aid prospects in the future.

For example, avoid placing investments in UGMA or UTMA custodial accounts because those assets will be counted heavily against aid eligibility. But don't spend too much time planning for financial aid before your child reaches high school. Chances are the eligibility formulas, as well as your personal financial situation, will change significantly by the time your child gets to college.

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7. Start saving early 
With college costs increasing at an average annual rate of close to 6 percent, it's best to start your college savings fund early in your child's life.

If you begin when your child is born and set aside $200 each month in an account earning 6 percent annually, you'll have enough to cover approximately 22 percent of the cost of attending four years at a private college (current average "sticker" price of $34,200), or about 52 percent of the cost of attending four years at your public university (current average "sticker" price of $14,400).

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