How important is it for parents to start saving early to build up a college fund for their children?

Pretty important.

College tuitions have gone up about 8 percent per year for the past 25 years. Today, an education at even a low-cost public four-year college or university typically carries a price tag of $40,000 to $60,000, while private institutions can top $150,000 for four years. Compound that by 8 percent per year for the number of years before your child goes to college and you'll have a rough idea of that future cost.

Fortunately, that same kind of compounding can work to your benefit. One key is to start early. Saving regularly and using the variety of savings vehicles available often means the difference between going to the college of your child's choice or going to the one you can afford.

529 saving plans in your state -- Every state offers 529 plans, named after the federal tax code that allows tax-free earnings for college educations.

Understanding prepaid tuition plans -- A prepaid tuition plan lets you purchase units of tuition for a state college or university at today's prices.

Comparing education savings plans -- A quick look at the difference and similarities of Coverdell accounts, 529 savings plans and 529 prepaid tuition plans.

FAQ about 529 plans -- Advice on working with a 529 college savings plan.

Save the tax-free way-- The Coverdell Education Savings Account, previously known as an education IRA, is earning better grades from taxpayers.

6 myths about Coverdell accounts -- An excellent way to save, but there are risks and limitations to understand before investing.

FAQ about education savings accounts -- Tips for understanding the details about Coverdell and other college savings accounts.

Education bond programs -- There's no penalty if you don't use these bonds for education purposes, but there are fairly low income limitations.

Instead of air miles, earn education dollars -- Now you can help finance your kid's schooling when you use your credit card.

-- Posted: Aug. 11, 2005