Unfortunately, college costs increase at about twice the inflation rate. Current increases average 5% to 8% each year, pushing college tuition and related costs higher and higher and seemingly further and further out of reach. It's difficult to estimate what higher education will cost in 10 to 15 years.

According to the College Board's (http://www.collegeboard.com) Trends in College Pricing, 2006-2007 average total education costs (including tuition and fees, room and board, books and supplies, transportation and other expenses) were $16,357 for students attending four-year public colleges and universities and $33,301 for students at four-year private colleges and universities. Out-of-state students attending public colleges and universities paid $26,304. Ivy League colleges average $36,604.

In October 2006, the College Board announced that four-year public colleges average tuition and fees slowed for the third year in a row, but prices are still up 35 percent from five years ago, after adjusting for inflation.

There is some good news, however. After grant aid and tax benefits are considered, full-time students enrolled in public four-year colleges pay $2,700 in net tuition and fees.

40% of students attending a four-year college paid less than $4,000 in tuition and fees.

70% of students attending a four-year college paid less than $8,000 in tuition and fees.

While you can't count on scholarships, grants, and other free aid, they are available, and many reasonable federal and private loans exist. So while you may not be able to cover all tuition and costs outright, you can pay for some through savings and borrow the rest if need be.

The government expects students and their families to contribute to the cost of college to as much as they can. If you're unable to pay for the entire cost of college, financial aid is available. That's how the financial aid system works. The difference between the total cost of college and your Expected Family Contribution (EFC) is considered your financial need, and the amount of aid you're eligible to receive. It helps to understand how (EFC) works and to calculate your contribution. When you do this exercise, you can get a better idea of how much you will need to save.

The formula for determining eligibility for federal aid programs is the same for all colleges. When you apply for financial aid, expect to answer questions about your family's income and savings. Most of this information is found in your tax returns, paycheck stubs, and bank and other financial account statements.

To calculate your EFC, use a calculator on the Web, or fill out the Free Application For Federal Student Aid (FAFSA) form and submit it to the financial aid office of the colleges you are applying to.

EFC Calculator

http://apps.collegeboard.com/fincalc/efc_welcome.jsp

Many people who want their children to go to college become intimidated by high tuition and ever-soaring costs. Instead of saving money, they do nothing. They believe it's impossible to save that much money, and that they need to cover all of the costs, and consequently don't do enough. And the more you save, the less you have to borrow.

So how much will it take to fund the education you want? Will these increases continue? How do you estimate future college costs and needed savings? It's not easy, but fortunately, we have some advice.

As with most things, it's better to be conservative with your estimate. Along with tuition there are room, board, travel, supplies, and living expenses. Keep abreast of college costs as well. Tuition will likely go up, possibly by a lot, but much larger, population forces are at work as well. The number of teenagers attending college will go down in the future as the college age population shifts. These factors may lower or stabilize tuition rates. But perhaps not. It's important to keep track of what's happening with college prices and adjust saving plans accordingly.

An easy way to figure out how much college will cost given current rates and increase is to use a college cost calculator, free on the Web.

FinAid Calculator

http://www.finaid.org/calculators/costprojector.phtml

Financial Calculators

http://www.fincalc.com/col_02.asp?id=6

http://www.finaid.org

http://www.collegeboard.com

http://www.collegeanswer.com