In estimating the costs for your child's education, first determine if you want to save for a public or private university.

Tuition and Fees*

These figures only include tuition. Additional expenses may include room and board, and other out-of-pocket expenses such as books, supplies and transportation.

Once you have selected the type of university and estimated the yearly expenses you will be facing, you can start looking at funding vehicles. Some choices for funding may include Coverdell Education Savings Accounts, Custodial Accounts, Investment Products, Cash Value Life Insurance and Section 529 Plans.

Other considerations may include:

• Financial Aid
  When the time for college comes, make sure you apply for financial aid. Many families mistakenly don't apply because they don't think they will qualify. It's worth the time to apply. Be careful when you convert any liquid holdings you have used for college funding into more conservative holdings. The capital gains and income realized could show up on your tax return. Since you must submit your previous year's return when applying for aid, try to liquidate investments before January of your child's junior year of high school.

• Types of Financial Aid
  There are a variety of different types of loan and grant programs you can apply for which may include: Federal Aid, Pell Grants, State Grant Programs, Institutional Aids, Stafford Loans, Parent Loans, Nonfederal loans.

• Tuition Tax Credits
  To help pay for higher education costs, the federal government offers parents and students tuition tax credit programs: Hope and Lifetime Learning. If you meet certain requirements, you can qualify for a reduction of up to $1,500 on your federal income tax bill. The Hope Tax Credit applies to tuition and fee expenses for the first two years of post-secondary education. The Lifetime Learning Tax Credit is available for all years of postsecondary education and for courses (even a single course) to acquire or improve job skills. You may be able to qualify for a reduction of up to $2,000 on your federal income tax bill.

For the most up-to-date information on rules and restrictions, visit the Web sites of the Department of Education and the IRS or speak with your legal or tax advisor.