Catch Up to College Savings

But the new legislation raised the age on the kiddie tax. Now, anyone who's 17 or younger pays tax at your rate. That means your high schoolers are no longer freebies.

Granted, you could transfer assets to your kid when he's a freshman in college as a way of getting the lower tax rate. Just make sure you monitor that money, or it may be blown on beer.

Find Free Money

Beyond saving, make sure to explore all the freebies, including grants and scholarships.

"Most students don't pay the sticker price for college," reminds Joe Hurley, the founder of savingforcollege.com.

So get that free money. Contact the university and request a list of the alumni grants. Check your local service organizations, like the Rotary Club and the Elks lodge. And then check the Web. Sites like college-scholarships.com and collegescholarships.com (one has a hyphen, one doesn't) list available scholarships.

Of course, you could just take out some loans and get financial aid. While they're far from free money, the federal government vehicles, like the Stafford and the Perkins, have really low interest rates -- around 7%. And they don't require credit checks or collateral.

Even better, if Junior takes out the loans in his name, he won't have to start repaying the tab until he gets a job, and he'll get a tax break of up to $2,500 on any interest he pays. Check collegeboard.com and finaid.org for more info.

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