The College Crunch: How to Cough Up that Money for Your Child's Education

College is not cheap. Anyone who has sent a child to college has an idea of how emptying college can be on a family's finances. With Private Institutions charging upwards of $30,000 a year for tuition, even the most optimistic outlooks can only go so far. Added to the transportation costs, food, housing, and other expenses, the number can look so big that it came out of a movie. Here are some tips on how to minimize the costs for an investment in your child's future.

Get a 529 Plan

A 529 plan is similar to a 401(k) in that it provides growth on tax deferred money that can be saved and used for payment with expenses related to college. Contributors (usually the parents) retain control of the accounts, which also receive favorable treatment in financial-aid calculations. There is no substitute to starting early, and if your family wants to lighten the load that needs to be paid later on, start when your child is in elementary school. With time on your side, you will be amazed at how much your savings can help you in a pinch. Some say that the 529 plan is the best way to go, and unless you have loads of cash sitting under your mattress, this wouldn't be a bad idea to look into.

Make your Child get a Part time job

All of that extra spending money you are giving him/her is hurting not only their financial budgeting capabilities, but also hurting your ability to pay for their college education later on. So all of those extra pairs of jeans or shoes being bought at your expense will no longer be at your expense. Once your child learns the value of hard earned money, he/she will be much more appreciative in your helping him/her pay for college. Getting a part time job is not only a valuable way to learn how it is to be in the workforce, it is a source of small income that could potentially amount to a lot of savings for you.

Consider In-state

The differences between colleges in-state or out-of-state are not much, provided your child hasn't gotten accepted into Harvard. If you send your child to an accredited university inside of the state you live in, you pay taxes in order to defer costs. Your child's tuition can be as low as $2000, and if you don't make much, the cost of your child going to college can even be free.

Consider Public Schooling

Another not so different choice to make is whether your child needs the "name" of a private school. If you are willing to dish out more money to put the name of a certain university on your child's transcript then by all means go for it. If not, many public schools have top rankings with regard to certain majors, and who's to say that public universities don't offer a good education?

Take out a Loan

This sentence strikes fear in many parents, as the interest rates on a college loan can be as high as 12% after graduation. If you really must find a quick source of funds, taking out a loan is better than digging out of your retirement, mainly because you can't take a loan out on retirement funds. It's as simple as that. A loan can be paid off, but who's going to secure your financial security later on? There are different rates out there with respect to different income level brackets, college majors, and place of residence.

Remember to pay a loan off as soon as you can, any small amount can reduce the amount of interest you accrue on the loan, so don't try to save a huge lump sum and dump it off later. Pay for a loan with today's money, not tomorrow's.

Study Hard

If your child studies hard and has a great academic track record, finding scholarships and funding can be extremely easy. Employers and various companies are willing to invest in a student who shows that they treat their studies seriously and will have a bright academic future. This skill will also help your child later in college, as good study habits are a measure of how fast and how well he/she will graduate. Instilling good study habits should be a must, as these are skills that will help them later on in life (and maybe even an extra scholarship money).

Research Financial Aid

Depending on what college your child will be attending, there will be certain financial aid packages available for students. Various colleges offer varying levels of financial aid, but be sure to make a note of it and do some research on how much the institution will give. Most institutions will base this on your income level, but even if you don't very little, they still have opportunities such as grants and work-study opportunities among other things.

If you want your child to pursue a higher education, college is the first step on that path. Although the fees may add up, remember that this is an investment that others would kill to have, so if you have the resources, don't hesitate to use them. Loans are really a worst case scenario, as your child can get a great education at a lower cost. Be on the lookout, attend financial aid meetings, and remember to keep your child's best interests at heart without emptying your bank account.