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Even if you use all the strategies we've given you so far, chances are you'll still have to pay for at least part of your child's education. Here are the best places to look for money if the college bill is coming due:

1. Tap your home equity. As you probably know, interest paid on your mortgage is usually tax-deductible. When you're ready to pay for your child's college education, tap your home equity with a home equity loan. We realize this may not be an option for some of you if your house has declined in value. But if is, this is definitely better than going to the bank for a personal loan that won't be tax-deductible - and will be charging you a higher interest rate.

2. Borrow from your pension plan. If you need to borrow from your pension, you'll probably pay somewhere around bank prime rate. The interest you pay on this loan isn't tax deductible, but at least you get the interest, not your bank. The principal and interest are paid back into your account, and your remaining assets continue to grow tax-deferred - so get that money back in there as quickly as possible. Remember, it's for your retirement!

3. Buy rental property. Here are the two best strategies for using rental property to finance a college education:

• Hire your child to maintain a rental property near your home while he or she is in high school. Your child gets the bucks for college and you get the deduction. Make sure you keep good records of when your child worked for you.


• When your child decides on a college, consider buying a rental property near your child's college. Rent the property to students, including your child, and have your child manage it. Your child gets a free room (part of your compensation package for the "manager"), some spending money (you pay a small salary for handling maintenance and collecting rents), and you may get a tax deduction for investment property. When your child graduates, sell the property. Most college towns offer good real estate appreciation opportunities.

4. Take your folks up on any offer to help pay for college. You probably know that you (or your relatives) can give up to $10, 000 per year to each of your children or grandchildren without your having to pay gift tax. Well, when it comes to educational expenses, Uncle Sam is even more generous. You can give an unlimited amount of money toward tuition costs for any student. This exclusion applies to tuition only (board and books don't qualify), and you must pay the money to the institution, directly not to the student.

Another great way to put aside money for college is through a trust. Read our tips for choosing the right one here.