How to afford college at all costs

The nation's total student debt is about $896 billion, according to a recent report by Project on Student Debt, an initiative of the Institute for College Access and Success, a nonprofit independent research and policy organization. That's more than the nation's entire credit card debt.

So, as kids and families receive acceptance letters from schools, the euphoria of getting in is quickly tamped down by the fact that it's going to potentially cost about $30,000 a year -- or more.

So what can you do to make sure you can pay for your dream school?

On "The Early Show," CBS News Business and Economics Correspondent Rebecca Jarvis advised, if you haven't already, you need to fill out the Free Application for Federal Student Aid, also known as the FAFSA.

"You go to the website and fill it out," she said. "It is a first-come-first-serve type of program. So, for Pell grants, for Stafford loans, for work study, this is what you're applying for through the FAFSA. The first people to fill it out are the first people to get it. On average, they get about $7,000 more just for filling it out earlier."

Co-anchor Chris Wragge said, "A lot of families fill it out saying there's no way we'll qualify for financial aid. You kind of have to appeal to some of these places, these schools and make a case for yourself."

"You do," Jarvis agreed. "And if you received a letter back from a school saying, 'Welcome aboard, we'd love to have you,' there is no reason why you can't go back to the school and say, 'Listen, I would love to attend, but financial aid package that you put together for me is not one that I can live with. It's not one that I can afford to pay.' One great thing to do is, if you get into a handful of schools, and one of them gives you a great financial aid package, take it to the school where you really want to attend and say, 'Listen, I would come here if you could do what the other guys are doing for me.'"

She continued, "If there's been an illness in the family, there's been a change of job circumstances, someone in the family lost their job, you can also appeal to a college or university on those grounds. About 30 percent more people are appealing these decisions now than they were before the recession began. So it's becoming more common."

Wragge said calls and appeals may help.

"You never know," he said. "The worst any school can say is no."

Jarvis added, "They're not going to say, 'You can't come here because you called us up.'"

As for parents with their own debt, Jarvis recommends parents begin to pay down their credit card balances now.

"You pay off some of the high interest loans that you have outstanding and all of a sudden you make your assets look a little bit smaller," she explained. "Now colleges, when they determine how much financial aid they're going to give, they look at those assets. So let's say you have inflated assets, but you also have a lot of outstanding debt. All of a sudden you're going to get a smaller financial aid package. If you get rid of some of those debts, you've decreased your assets a little bit, but you look better to a college and they are more inclined to give you more money."

But what shouldn't you do to help your child pay for college?

Jarvis recommends never dipping into your nest egg.

"You absolutely should not do it," she said. "So don't take money out of your 401(k), don't take it out of a Roth IRA or an IRA. ... The loans that you can get for college are some of the lowest interest rate loans there are. So you're much better off taking out new debt for college, and specifically for that payment, by both the student as well as the parents, than you are dipping into parents' retirement savings."

If you're planning things out far in advance, Jarvis recommends a 529 education savings plan.

"These are plans that have tax-deferred savings inside of them," she said. "When you actually take the money out for qualified education expenses, it is not taxed at a federal level. However, there's about 80-plus of these plans out there. So you need to choose one that's right for you. Some of them are higher in fees. Look at those fees and make sure they're not outweighing the benefits. And then research your state's program because they're run by the states."