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Another guaranteed-savings vehicle Wiener recommends for families that may not qualify for aid is a term life-insurance policy--one that will expire just at the time your child is ready to enter college. If you are a parent under 40, for example, for less than $1 annually per $1,000 of death benefits, you can ensure that the money will be there when your child is ready to enter college, even if you are not around.
Regardless of your income, many states allow you to either prepay tomorrow's tuition at today's rates or save in some other tax-favorable education account, for instance one that lets your money grow tax-deferred, much like an IRA.
"There are probably smarter ways to invest money," says Barbara Ellis of the $7,000 she and husband Chris paid into Colorado's Prepaid Tuition Fund for 16-month-old Lexi's college education. "But I'm no whiz at investing, and this way I know it's taken care of."
The trade-off is what you'd expect: investing in market instruments will probably yield higher returns and give you much more flexibility, but prepaid plans, while earning relatively less, ensure that you will have what you need when you need it. "The discipline of savings is the key," says Wiener.
For the Ellises, that means no need to apply for financial aid or be worried about market dips--and whether they can afford vacations. Their investment takes care of four years' worth of Lexi's tuition (any extra money from the fund can be applied to the cost of room and board or books), as well as her parents' peace of mind.
That's what the government was attempting to give families when it created the Education IRA last year. It was a good idea in theory. In practice, however, it doesn't do much for most families. "I would not recommend that any client save money in an EIRA," concludes Satovsky. Colleges have yet to decide how they'll count that money when determining aid, he reasons. Furthermore, in the year they withdraw from their EIRA, students won't qualify for the other generous programs created by Congress last year: the HOPE scholarship and the Lifetime Learning credit. Nor can money they withdraw from an EIRA be used in conjunction with a prepaid tuition plan. Since EIRAs are not considered retirement funds, they are set up in a child's name, and their value is calculated in the federal formula for financial aid. Result: colleges will take a bigger bite out of the savings.
There are a few ways you can send your children off to college and not be worried about all these calculations and caveats. You could be Bill Gates and buy the college of your choice. You could steer them toward one of the five U.S. service academies, where an appointment comes almost entirely at taxpayers' expense, or toward Berea or the Webb Institute, where tuition is free. Or you could get a job with Wilson Greatbatch Ltd. in Clarence, N.Y., which has an education fund that pays the full freight for company employees and their children. But chances are, those aren't options, in which case all this advice just might be worth a degree in something.
Jillian Kasky is the editor of TIME/The Princeton Review's The Best College for You, available on newsstands on Aug. 17.
--With reporting by Greg Fulton/Atlanta, Maureen Harrington/Denver, Marc Hequet/St. Paul and Adrianne Navon and Megan Rutherford/New York