Planning for college can begin as early as birth, and for that matter, even before birth. Financial planning in early years can make all difference in world when it comes time to have to cough up all that cash! The following are some of best ways to save for college:

Custodial Accounts: With Uniform Gift or Uniform Transfer to Minors Act Accounts (UGMA or UTMA), parents, grandparents, etc. can each contribute up to $11,000 per student per year (2005). This money can be used for college or any other purpose. Although money remains in student’s name, custodian, usually a parent, has absolute control over account – i.e. stocks, bonds, mutual funds, savings, etc. UGMA accounts accept cash only. UTMA accounts accept cash and property.

The Downside: UGMA and UTMA accounts are irrevocable gifts that are considered student assets. Since students have no asset protection allowance, these assets are assessed at either 25% per year at schools that employ institutional methodology, (Ivy League and high profile private colleges), or 35% per year at all rest that employ federal methodology! Therefore, this option must be used with extreme caution!

Education IRA’s a/k/a EIRA’s: Single parents with an adjusted gross income (AGI) of up to $110,000, and joint filers with AGI’s up to $190,000, can contribute up to $2,000 annually to an EIRA. Earnings accumulate tax-free and can be withdrawn tax-free without penalty to pay for a private elementary, secondary, or college education.

The correct order is: (1) The application is first (2) followed by essays, which should be attached to application unless there are specific instructions to contrary; (3) Next is resume, which should be stapled together, but not to application or essays; (4) The special essay(s) follow and should be paper clipped to resume as opposed to being stapled to it. Attach a large paper clip to all of above to ensure everything stays in proper order, and then send entire package overnight or 2nd day with a signature guarantee. Whew!

If by any chance you’re planning to submit application electronically, consider this very carefully before you click submit key. You may accidentally send application before it’s completed, or send it with errors. What will you do then, and how will you get a copy for your records?

I’m a firm believer in Murphy’s Law, that if anything can go wrong, it will. No, that’s not pessimism, it’s realism. The transmission could get garbled, arrive incomplete or disappear from face of earth, all without your knowledge. The application could arrive with your name on “address” line, and all rest of your information pushed down, out of place, never to be processed!

As I said in a previous article, despite claims that all of these bugs have been exterminated, if it were my student, I’d mail it. Any risk is too much of a risk that application will not be received, be received with errors and inconsistencies, or be received incomplete. In any case, if anything goes wrong, anything at all, whatever excuse is, it will not be acceptable to school and an otherwise qualified applicant will be called out on strikes before they even get up to bat! Don’t let this happen to you!