Secrets to paying for college

(MONEY Magazine) -- You knew it was bad, but now that your child is close or getting ready to go to college, you're starting to get a truer picture of how bad. This year's estimated $22,300 total price (including tuition, room, board, books, and fees) for the average public college takes nearly a third of the annual income of a typical family with college-aged kids.

That's up from 15% a generation ago. At private colleges, the average asking price of $43,500 is equal to about 60% of that family's pay, vs. 33% about 20 years ago.

Ah, but you probably have a plan. Hoping your brainiac kid will get a nice scholarship to defray those costs?

Sorry, those awards typically knock the price down only by a third. Sending him to a public school to keep costs in check? Okay, but with state budget cuts prompting colleges to cut core classes and slap on extra fees, you'll still be lucky if he gets out in four years for under $100,000.

No wonder the percentage of Americans who say they are "very worried" about being able to afford college has been rising steadily since 2007, last year surpassing concerns about affording retirement, according to Gallup polls.

With parents of all types looking ready to join the Tuition Is Too Damn High Party, college affordability has even become an election year talking point for President Obama and his Republican rivals.

Don't bank on gridlocked Washington coming to your aid anytime soon, though. Instead, you have to devise your own strategy to fight back against crippling college costs -- not just the ones schools make public, but also the myriad extra charges that can make the real bill even higher.

Indeed, it's not just about tuition, it's about rising room and board costs, negotiating a reasonable financial aid package, and not being saddled by student loans.

How we cut college costs

Let the advice that follows -- a roundup of insider secrets from college counselors, administrators, and parents in the trenches -- guide you. Though each strategy alone may be worth a few hundred to a few thousand dollars, families who use several can cut their costs by $10,000 a year -- or more.

The estimates you get each spring for the upcoming academic year reflect the average tuition price paid by students at the school. Estimates for 2012 -13: about $8,600 at the average public college; $29,000 at the typical private school.

Count on tuition rising at least 3% annually at private colleges and 5% at public schools, assuming prices continue to rise at their recent rate. Got a kid attending a major public university?

Expect to be billed more than the average tuition rate for certain high-demand classes (often, in business or engineering) or many upper-level courses. The surcharges average 11% but can run 30% or more, according to a study by Glen Nelson, now an executive with the Arizona Board of Regents. And you may be paying for more than four years -- if current trends continue, only about 650,000 of this fall's 1.8 million freshmen will graduate on time.

Shorten the pain. Many students fail to finish in four years because they don't plan out their required courses, or they add minors or switch majors. Urge your child to plan each semester's schedule with an academic adviser.

Underclassmen should take exploratory courses that will support several majors, says Curtis Sandberg, director of academic services at Berea College, which has raised its four-year graduation rate from 29% in 1996 to nearly 50% today.

What if an upperclassman gets fed up with psychology and wants to start over with, say, business?

Sandberg suggests compromising: Maybe there's a major, such as marketing, that makes use of most of the courses already on the transcript. If that doesn't work, he recommends toughing it out, even if you no longer love your concentration. "Except in a few areas, people will care more about the skills you've developed than your specific major," he says.

Of course, you'll save even more on tuition costs if your student finishes in less than four years. High schoolers who start building college credits through Advanced Placement tests, and who then take a few extra classes at college during the school year or over the summer break, can finish in as little as three years.

A number of colleges have recently introduced formal three-year degree programs. But be realistic: "This [accelerated degree] is for a very small subset of students who are very focused and don't change their majors," warns University of Massachusetts at Amherst provost James Staros.

Pay creatively. Many colleges give parents the chance to save thousands on future tuition bills by prepaying at today's prices.

If your college doesn't have its own prepayment option, check to see if it's one of the more than 270 colleges belonging to the Private College 529, which allows you to invest as little as $250 for as few as three years. If your child is a freshman, you have until the end of June to pay some of senior year in advance at today's prices. That would save an estimated 10% to 12% on the part of the bill you're able to prepay.

Milk the tax breaks. Pay at least $4,000 of the bill for tuition, fees, and books from an ordinary checking, savings, or taxable investment account -- even if you have money specifically earmarked for this purpose in a 529 college savings account, advises Kal Chany, author of "Paying for College Without Going Broke." That way you can claim the American Opportunity Tax Credit, worth up to $2,500, on your 2012 return (to qualify, your income must be below $180,000); since a 529 plan also comes with tax breaks, you can't double- dip and use that account to pay the same expenses as you're using for the credit, Chany explains.

You can then use the money in your 529 to pay additional tuition costs or room and board bills. Parents who earn less than $150,000 can also deduct $2,500 a year in college loan interest from their taxable income.

NEXT: Handling housing

Secrets to Paying for College:

• Taming tuition
• Handling housing
• Finessing financial aid
• Braving borrowing

For everything you need to know about what college will actually cost you and how to make it more affordable, see our College 101 guide.