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Best Value Colleges

Saving for your child's college education is an overwhelming task, one that many parents neglect.

On The Saturday Early Show, Vera Gibbons, a correspondent for Kiplinger's Personal Finance magazine, shared some saving tips for college, including what schools are the best value for the dollar.

There is no doubt that sending a child to college is expensive. Just thinking about the impending expense is overwhelming for many parents. One report said a baby born in 1998 will probably have four-year college expenses totaling $300,000. Luckily, Gibbons says, figures like that are exaggerated. points out that such numbers are not realistic. They are based on the highest priced institutions, and only a handful of students wind up attending the top dollar schools. According to the College Board, 70 percent of students attend colleges where tuition and fees are less than $8,000 a year.

Also, those mind-blowing numbers do not take into account the fact that a majority of students receive some sort of financial aid.

Finally, a study released last month reported that most parents tend to overestimate the cost of college. The study also found that by the time their children were in the 12th grade, only half of parents had researched college costs.

So how much, ideally, should parents have saved for college by the time students head to school? The answer may surprise you.

According to Gibbons, parents only need to have one-third of the cost in the bank. Another third should come from current income and financial aid, while the final third should come in the form of loans (future income). In other words, one-third each from past, present and future income.

Gibbons says the sooner you can begin saving for college, the better - time is your best asset.

According to

"If you start saving early enough, even a modest weekly or monthly investment can grow to a significant college fund by the time the child matriculates. For example, saving $50 a month from birth would yield about $20,000 by the time the child turns 17, assuming a 7 percent return on investment.

"Saving just $25 a week from birth to age 17 at 5 percent interest will yield $34,839.45, a nice college fund," Gibbons says.

Even $10 a week can add up over time. The key, Gibbons says, is to set a goal and stick with it, no matter how small the amount.

Gibbons gave the following example of the power of saving:

Saving $10 a Week

  • After 4 years = $2,304
  • After 17 years = $13,936
    *assuming 5 percent interest

    But what if you haven't been squirrling away money for years and your child is ready for college? Are you out of luck? Gibbons says no.

    There is a lot of money to help families get their kids through college. Sixty percent of students receive financial aid, and half of those receive grants, which never have to be paid back. And, it's never too late to start saving. Remember, if you receive loans for school, you have four years before you need to begin re-paying them.

    Gibbons offers a few other strategies for last-minute savings.

    • Avoid volatile investments:
      This is not the time to try and hit it big in the stock market. Stay away from anything risky or volatile; you won't have time to recoup potential short-term losses.
    • Investigate all aid options: At this point, every little bit helps. Look for scholarships online. Gibbons recommends Take advantage of all tax credits and deductions for which you are eligible. Complete a federal application for financial aid to see what loans or grants your child might receive for different schools and ask these schools about their work study programs.
    • Enroll in loyalty programs: It's free to sign up for programs such as Upromise and BabyMint. Once joining a program, you receive rebates from two to ten percent from a huge number of vendors, everything from grocery stores to toy stores to car dealers. The rebate is automatically funneled into a college savings account. Family and friends can also join your account so their shopping benefits your child.
    • Find "value" schools:

      Believe it or not, there are colleges that offer a top-notch education and won't run you into debt. Kiplinger's worked to find 100 public schools that are great values.

    All 100 schools can be found on the Kiplinger Web site.

    The magazine ranked the schools according to the best value for in-state students and best value for out-of-state students.

    Best values for in-state students

    1. UNC, Chapel Hill
    2. University of Virginia
    3. College of William & Mary
    4. University of Georgia
    5. University of Florida

    The average in-state costs for these top five is about $11,600 a year. But once you figure financial aid into the equation, that cost falls to $6,600 to $6,700. On average, in-state students graduate with about $14,000 in debt. Gibbons says that's pretty good, considering that loan provider Nellie Mae charts the average student debt at $18,900.

    Best values for out-of-state students

    1. UNC, Chapel Hill
    2. Truman State University
    3. Binghamton University
    4. University of Texas, Austin
    5. College of New Jersey

    The average annual cost for out-of-state students at these five schools is $20,000. After financial aid, the cost is just under $16,000. The average student graduates with about $12,000 in loans.

    Gibbons says much of the cost difference between in-state and out-of-state schools has to do with the size of the college, and the name recognition. Some of the lesser-known, smaller schools on the Kiplinger's list, such as Truman and the College of New Jersey, have a harder time attracting out-of-state students. They want to diversify their student body profile so they may offer better aid packages in the form of grants, which don't have to be paid off, to attract those students.

    Kiplinger's whittled their list from 500 to 100 schools, based on a variety of measures of academic quality such as admission rates, student-faculty ratios, student instruction spending and more.

    The magazine also looked at total costs, the amount of student need met by financial aid at each school and the average debt accumulated. Overall, academic quality accounted for two-thirds of a school's final score, Gibbons says. Cost accounts for the other third.