As any parent knows, helping your children get into the college of their choice is no picnic. But then comes what may be an even bigger headache: paying for it. And with tuition outpacing inflation, this will only get harder. Fortunately, with a little planning and patience, you and your children should be able to fund all four years (and maybe even grad school!) without going bankrupt.

Here are five major things to keep in mind:

1) Don't wait! Almost anything on earth is more fun to think about than how to pay for college, but the sooner you get a handle on the whens and hows of funding it, the better. For example, consider that January 1 is the first day to apply online, at no cost, for federal student loans. And while July 2 is the deadline, aid is awarded on a first come, first served basis—so the sooner you apply, the more likely you'll be approved.

2) Begin your search for sources of funding with free money. By free money, I mean scholarships and grants. Check to see if your employer, your professional association, or a specific educational institution has any to offer. Then get busy. Search the web—both for private money and for funds from federal and state governments. Some grants and scholarships are based on financial need, others are awarded based on achievement, religious affiliation, ethnicity, memberships, hobbies, or special interests. A great place to start is the book How to Go to College Almost for Free by Ben Kaplan. This guy knows what he's talking about—he snagged more than $90,000 in merit scholarships as a high school senior.

3) After you've explored all sources of free money, look next for government money. That is, federal loans. These account for the bulk of student loans. The only hitch with federal student loans is that they are capped at $23,000 for an undergraduate student spread over four years. Here's a good place to start:

4) Increasingly, parents are looking to private sources of money – loans from private lenders. Hundreds of private institutions, including banks, offer such loans. Interest rates often are as good or better than other types of loans and private sources effectively put no limit on how much you can borrow. They are fast becoming a preferred way for parents to pay for college. Check out some options at

5) Time is money. If possible, start saving for your child's college fund the moment he or she is born. If not, start as soon as you are able, to give your nest egg the benefit of compounded interest. Besides state prepaid college accounts, consider something called 529 college savings. Offered in most states, these accounts typically offer additional tax benefits. You can get a quick overview at