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Parents want the best for their children, but when it comes topaying for higher education, many feel daunted by rising tuitioncosts.

In 2008, tuition rose an average of 6.4 percent over theprevious year to $6,585 at public in-state institutions, and 5.9percent to $25,143 at private colleges and universities, accordingto an October 2008 report by The College Board. Neither of thosetotals includes housing, which averaged about $8,000 per year.

For many parents, sending children off to college could shift afamily from financial stability to a lifetime of debt. Planningearly for the cost of education can keep your family fromoverextending while still allowing you to provide your child withthe educational tools necessary for his or her success.

The key to navigating the financial territory of providing foryour child’s higher education costs is to explore every availableopportunity to lessen the financial burden, from scholarships tolifeinsurance. Here are four tips for getting started:

Start investing now

As with any long-term investment, consistency is critical.Committing even a few dollars a week will ultimately yield asizeable college fund.

For example, many parents have turned to the 529 investmentplan. The 529 is a state-run plan set aside solely for educationcosts. Earnings from the plan are not taxed when used to payeligible college expenses. Some states offer matching grants aswell as income-tax deductions or credits to participants.

Rules vary from state to state, and you don’t have to open a 529college-savings plan in your home state, so it’s advisable to shoparound. However, fewer investors are opening 529 plans due toconcerns about stock market volatility, and those who have them arecontributing less. Parents today seem to be seeking moreconservative vehicles for their money.

Explore loan options

The two primary sources for loans are private and federal. Thecredit crisis has made private loans harder to come by, withseveral lenders closing their doors.

The situation is much better on the federal front. Grants andfederal loans for students increased for the 2008-2009 school yearby a per-student, post-inflation average of 5.5 percent. Keep trackof the viability of both loan sources as your child approachescollege age.

Identify “hidden” scholarships

Don’t rely on receiving scholarship money from the college yourchild plans to attend. Instead, seek oft-overlooked organizationsin your community such as the American Legion and the Rotary Club,both of which are longtime supporters of prospective collegestudents.

Your local high school probably has a list of similarorganizations. Also, ask your employer about its scholarship orgrant program, and ask your spouse to do the same. Many companies -particularly larger ones – have such programs.

Buy life Insurance, or re-evaluate your current policy

With tuitions, fees and room-and-board costs skyrocketing, yourcurrent termlife-insurance policy may be inadequate as your childrenapproach college age. Even if your children are years away fromcollege, adding coverage now would lock you in at a lower premiumrate.

Undoubtedly, higher education will have a positive impact onyour children’s future, but you need to consider your own future aswell. Paying for their education shouldn’t come at the expense ofyour financial stability.

Exploring these options will prepare you for the day thoseacceptance letters come in, whether it’s two or 12 years away.

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