"Don't take a year off to save money," Kantrowitz says. "It's better to complete the degree to get to that higher-paying job quicker, especially in today's unstable economy."

Think before you sign

Parents often think that cosigning simply means they are helping their child get a loan, but a cosigner is equally obligated to repay the debt if there is a default.

"Parents need to protect their own credit," says Kantrowitz. "Realize that 'cosign' means 'your loan,' which can use up your own credit resources. Also, I never advise even considering a home refinance, using credit cards or borrowing from retirement savings to pay for college."

Because they are the ones who will sign the checks, parents ultimately have control over how much they'll help their children, says Cruze.

"Think long term," she says. "When your student graduates and gets their first job, and may be considering a mortgage loan, they will be so thankful not to be burdened with payments for student debt that might have been avoided by working hard and taking the least expensive route through college."

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