Keeping up with the rising cost of college, especially in a dicey economic and market environment, is nothing like the good old days for some people.
"My father was a farmer and when the tuition bill came he always sold a cow," said Merra Lee Moffitt, a certified financial planner.
College costs will likely continue upward at an average 6 percent annual clip without a slowdown, said Joseph Hurley, founder of SavingForCollege.com in Pittsford, N.Y., whose site allows you to compare state savings programs known as 529 plans.
"Start when the child is young," said Hurley, author of The Best Way to Save for College: A Complete Guide to 529 Plans. "If you invest $200 a month for a newborn until college, that should get you about 60 percent of the four-year cost of a public university and 25 percent of an average private college."
Invest the money in a 529 college savings plan rather than a Uniform Transfers to Minors Act custodial account, Moffitt said. UTMA money is considered a student asset in financial aid computations.
A 529 plan has no restrictions on income, no annual taxes on dividends and no annual limits on contributions. You can also transfer money among children.
The nation's best 529 plans in terms of quality investment choices and low fees, according to a Morningstar survey, are:
*Illinois Bright Start College Savings Program (sold direct). Program manager OppenheimerFunds offers index and managed funds.
*Maryland College Investment Plan (sold direct). Program manager T. Rowe Price has an age-based portfolio of actively managed funds.
*Virginia Education Savings Trust (sold direct) and Virginia College America 529 Savings Plan (broker-sold). The first offers a collection of actively managed funds and the latter a broad range of American Fund offerings.
*Colorado Scholars Choice College Savings Program (broker-sold). It has a split of growth and value strategies with numerous outstanding fund managers.
Andrew Leckey writes for Tribune Media Services.