When Linda Call's daughter left for college in August 1999, the price for in--state college tuition and room and board was set at just over $9,100 a year. By the time Call's daughter graduated, the price had risen by more than $750 a year. Today, an entering freshman at the same university pays over $12,000 a year.

Call, like thousands of other parents, is a victim of tuition inflation. The College Board reports that parents can bank on tuition increasing an average of 10 percent each year for public schools and 6 percent for private. What many parents don't know is that with a bit of research, you can sidestep the inflation monster and put those dollars toward a better cause.

The Safe Bet: 529 Pre-paid Tuition Plans
The best way to combat tuition inflation is to think ahead. 529 pre-paid tuition plans (available in 17 states across the nation) let you purchase college credits now to be redeemed when your child heads off to school. Starting a pre-paid plan early will allow you and others who want to contribute to begin paying for an education five, 10, or even 15 years before your child even thinks about taking the SAT.

Betty Lochner, director of Washington state's pre-paid Guaranteed Education Tuition (GET) program, suggests investing early. "If you would have bought 400 units in 1998, the first year our program opened, you would have paid $14,000 for four years of tuition," she states. "If you were using those tuition units this fall, they would be worth $22,000 -- a 57 percent return on your investment."

David Grimm, a collections agent and father of two, describes pre--paid plans as his financial "peace of mind," and estimates that investing a little each month will save him upward of $50,000 by the time his 3- and 5-year-old daughters make their college decisions. "I've done the research and I can't find anything else that will guarantee a return," he comments. "Anyone saving for their kids' education would be crazy to pass it up."

The Big Risk: 529 Saving Plans
Though pre-paid plans guarantee that you'll save, some people feel they can beat inflation faster by skillfully playing the market. 529 college savings plans (available in 48 states) operate like a mutual fund, giving parents the ability to choose how their money is invested and assume the responsibility for the plan's gains or losses. Lochner states that how well these plans do depends entirely on how wisely parents choose their investments. "A college savings program may actually do better than a pre-paid program," she states, "but the risk goes to the purchaser." In other words, nothing is guaranteed.

Jeannine Dellwo, executive assistant for Washington's Senate Democratic Caucus and mother of two, learned that lesson the hard way when she invested half of her daughters' school savings into the stock market and half into a pre-paid plan. "My money in the stock market is still less than what I put in five years ago," she says. "I just kicked myself that I didn't put it all in GET."

To minimize the risk, most states offer several college savings choices ranging from low-risk investments to higher-risk options, which allows parents to start with a risky portfolio and then move to a more secure option as their child approaches high school. To avoid a potential collapse, Dellwo and Grimm split their money between both kinds of federal tax-exempt 529 programs. "I've got a guaranteed return and then I've got a return that's linked to the highs and lows of the stock market," Grimm says. "I like to think I have the best of both worlds as far as college savings is concerned."

The Easy Way Out
Despite their benefits, 529 plans aren't the right choice for every family. Both are long term and often incur fees, as well as require a minimum investment period before cashing in. Plans may also come with stipulations on how and where funds can be used. The easier, but less lucrative way, to avoid tuition inflation is to simply attend a school that doesn't believe in it. George Washington University (Washington, D.C.), Pace University (New York, NY), and all Illinois public institutions offer fixed-rate programs that freeze tuition during a student's first year. Parents pay one flat rate all four years and never have to contend with an increasing sticker price.

Steven Poe, a senior at Central Michigan University (CMU, Mount Pleasant, MI), states that the new fixed-rate CMU Promise program has been well-received by students and parents alike. "Now, families can budget accordingly," says Steven. "The fact is that it's simple -- they can see a bottom line and it won't change. That's appealing."

For more information on 529 plans, log onto www.finaid.org to find out what's available in your state, or contact your student's prospective school for details on flat--rate options.

Parents >> Visit www.collegebound.net/parent--portal for strategies and advice on being a happy college-bound family.

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