Story first appeared in USA TODAY.

After many families carefully mapped out a plan to pay for college costs, the economy’s downward spiral forced them to rip it up.
Joy Erickson plans on attending Northen Arizona University in 2012 to get her bachelors in environmental education. The recession has forced many families to rip up their plans for paying for college and one expert strongly advises parents against making 401K withdrawals to pay for schooling.
State-budget cuts forced many colleges and universities to make huge tuition hikes. Job losses siphoned money for college savings accounts.
When home values nose-dived during the housing bust, students and parents lost the ability to tap home-equity lines for extra cash. The Dow’s wild swings have chewed up balances in 529 college-saving accounts, which often include stocks.
Parents are desperate, said April Osborn, executive director of the Arizona Commission for Postsecondary Education, which administers several federal and state grants that go to Arizona college students.
While college costs rise, there is less grant money to go around. Three state grants that awarded up to $2,000 to college students were suspended last year.
Two federal grants, including one that provided up to $3,000 for awardees, were eliminated and won’t be available starting this fall, she said.
While the economy has taken a toll, many parents are struggling to pay for college costs because they were too optimistic early on, Osborn added.
When children are young, many parents assume that they will have higher salaries when it’s time to pay tuition bills or that their child will be an “A” student who’ll get scholarships.
But when high school rolls around, the fact is their kid is a solid ?B? student, not a super athlete and they have no savings, Osborn said.
Yet many parents still yearn to foot the entire bill ? or most of the bill ? for college so their kids can avoid a lot of debt.
That’s a natural urge, but it’s also unrealistic, said Lynda Elley, financial adviser for CopperWynd Financial in Scottsdale.
Elley said that we need to start dialing back our expectations. She said everybody wants their kids to have the very best, but we’re not teaching them anything about fiscal responsibility if we are giving them the best of everything and they haven’t done anything to earn it.
Paying for college
? Make children part of the saving process as early as possible. No mall jobs? Try babysitting, yard work, dog walking, etc.
? Paying for their tuition? Start with personal savings, then go to government-backed student loans ? which have low interest rates ? and PLUS parental loans. Private bank loans are an option but have high interest rates.
? Use your network ? family, friends, church, etc. ? to help your children explore careers in high school. It will focus their high school and college studies, possibly cutting down on costs.
? Consider community college, which is far less expensive, for the first two years of undergraduate work and then a transfer to a four-year institution.
? Assess your child. Not an “A” student? A bit immature? Students often drop out after one year. Consider community college before splurging on a four-year school.
? Encourage students to make the most of high school ? by looking for opportunities for college credit or dual enrollment.
? Use retirement funds to pay for college costs.
? Overlook less expensive in-state schools.
? Overborrow for college costs. Keep non-tuition and academic expenses to a minimum.
? Overspend on housing, furnishings or cars for college students ? especially during the first few years, when many students drop out.
? Be afraid to let children take on some college debt. It will give them a bigger stake in their college success.


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