High-school seniors are now filling out college applications, while their parents freak out about how they're going to pay the five-figure yearly tuition. My many friends who are parents to kids of all ages are wondering how they're going to balance their 401(k)s with 529 plans.

Ken and Daria Dolan have good advice in their recent blog posting about affording college, but I need to add my two cents:
  • Skip the Ivy League for now, and focus on more affordable state schools and community colleges, at least for the first two years.
  • Don't break your back paying your kids' way through school; have them help pay their way .

Kiplinger's Personal Finance
editor Janet Bodnar has a good column about the new realities of paying for college. Families typically downplay costs in the college equation -- they're so intent on getting the kids into Harvard or Yale, because a non-Ivy League just won't do. But is it really smart to spend $40,000-plus a year for a a degree in a field that may not earn you as much as that in annual salary?

But, as Bodnar writes, nearly 70 percent of parents and students said postgraduate income wasn't considered or didn't make a difference when deciding to borrow. Today's economy is bound to change that mindset. Public universities and colleges report an upswing in applications (although California recently announced its budget crisis may cause it to turn down eligible students applying to its state university system -- and it's probably not the only one). Vocational schools are also a good bet, says Julie Tilsner in her "Underrated in America: The Trades" posting. Plumbers, electricians, welders and other skilled trade workers are sorely needed -- and can often earn more than a diploma-yielding college grad.

When I was a college senior, I had my heart set on Columbia or New York University for a journalism degree, but my parents balked when they saw the $20,000-plus annual tuition (this was back in the 90s; it's now hitting the $50,000 mark at both schools). I cried when my parents suggested a state school but when they laid out how much the debt load would be, my tears dried quickly and I applied to the State University of New York. And even then, I had to pull my weight in paying for my share of tuition -- working part-time jobs, applying for scholarships, focusing only on paid internships). But when I graduated from college, my parents and I were debt-free. Friends who I envied for attending the Ivies for undergrad and grad school are still paying off student loans in their mid-30s.

As for my Point #2 about having kids help pay their way, I've been talking to financial planners nationwide about this, and many wish their clients did more of what my family did. They say so many parents are forgoing regular deposits in their 401ks, IRAs and other retirement nest eggs so that the money is available for Son and Daughter to attend the college of their dreams. Wrong move, folks! Eric McClain, a financial planner in Birmingham, Alabama, sums it up: "While your children can take advantage of low-interest rates for student loans, you do not have the same opportunities to do so for retirement. Does it make sense to have your kid support you when you're 80 because you paid for all their college expenses?"

I want the best for my kids, but I do not want them or me to go into debt overload for it. I'm proud of what I accomplished as a state-school grad. I see no shame in attending community college for a couple years or trade school as an alternative, and I'll tell that to the youngsters. I can't say the Ivy League is overrated because I didn't attend. Still, when the plumber down the street from me is buying a vacation home near Lake Tahoe while my Stanford-educated lawyer buddy just got laid off, it gets you thinking... So kids, still have your heart set on Harvard? Crack those books, search the scholarship database and oh, look for a part-time job while you're at it. I'll open a 529 plan but I'm also buying a copy of Paying for College without Going Broke.

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