Tuition averaged nearly $5,000 a year at four-year public colleges and universities in 2005-06, and more than $21,000 at four-year private institutions, according to the College Board. (Those are national averages — averages for public New England institutions approached $7,000 a year, and more than $27,000 at four-year private institutions.) Room and board charges vary, but add thousands.

Add another $7,000 to $8,000 a year for room and board, and families were looking at total direct costs averaging $12,000 to $29,000 per year. And that’s not even taking into account books and supplies, transportation to and from campus, clothing, recreation, and other incidentals.

And the costs will only rise over time. How high will they be when it’s time for your children to enroll?

Very few families can finance expenses like this solely out of their current income. Financial aid may help ease the strain for some households, but there’s never been enough financial aid available to fully meet the needs of all students who could use a boost. And recent changes to government-backed education loan programs make them less advantageous than in recent years.

The earlier you start to prepare for college costs, the more options you’ll have. Many families have created savings or investment programs with an eye on future education expenses. Two increasingly popular tax-advantaged strategies are:

• A state-sponsored 529 college savings plan. The annual contributions limits are much higher (more than $200,000 per year in most cases), and here too the funds can grow tax-free. We can help you decide which state plan is best for you —Connecticut’s plan (for which Connecticut taxpayers may be eligible for a state income tax deduction on their annual contributions) — or another state’s plan. By investing in a 529 plan outside of the state in which you pay taxes, you may lose any tax benefits offered by the state's plan. Consider before investing whether you or the designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such states' qualified investment plan.
  
• A federal Coverdell Education Savings Account (ESA). You set aside up to $2,000 per year for each student, with the funds invested in stocks, bonds, mutual funds, or cash equivalents. While the contributions aren’t tax-deductible, the funds in the account grow tax-free, provided that eventual distributions are used to cover eligible education expenses, including tuition and some other expenses for college (or even for private or religious elementary and secondary school).