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If your child is five years away from going to college, you may be in a panic about being able to pay his or her way. But there are a lot of untapped solutions out there, including financial aid, scholarships and loans. In fact, billions of dollars of loans and aid go unclaimed because students fail to seek them out.

What it costs to go to college

To begin with, college costs vary largely and depend on whether you plan to send your child to a private or public college. Here is a breakdown of the average annual costs for the academic year 1999 - 2000.

Annual College Costs 1999 - 2000:

Source: College Board

It's never too late to invest

If you haven't saved a dime yet for your child's education, there's still hope. It's never too late to invest. If you are five years away from your child starting college, your money can still grow until then - and throughout the college years. Click here for more information.

Bridge the gap with grants/loans

You do need a reality check at this point. If you are in a panic about saving for your child's education, then you are probably going to need to find other ways, beyond your own investments, to fund your child's education.

To get financial assistance, begin by completing a Free Application for Federal Student Aid (FAFSA) online at http://www.ed.gov/. It determines the amount each family can reasonably be expected to pay for a child's school bills.

If your child can earn a grant or scholarship, that's the best place to begin funding his or her education. Grants and scholarships do not have to be repaid. Also, gift aid is available from private, state and federal sources as well as from colleges and universities. All kinds of college funding are available based on achievement, religious affiliation, ethnicity, sports or other special talents. The Student Loan Marketing Association (Sallie Mae), a U.S. government agency, is devoted to financing education and gives free access to its scholarship database. Visit http://www.salliemae.org/

Federal Stafford loans

There are two types of Stafford loans. Subsidized Stafford loans are available for students who have shown need as determined by their financial aid application. The federal government subsidizes the loan by not charging any interest until six months after the student graduates, leaves college, or falls below half-time attendance status.

The second type of Stafford loan is not based on need. Virtually all students are eligible for these loans. From the moment a student takes out an unsubsidized Stafford loan, however, he or she will be charged interest. Students are given the option of paying the interest while in school or deferring payments until repayment of principal begins.

In both cases, the federal government guarantees the loan, which ensures a very low interest rate. Currently, students may be able to borrow up to $2,625 for the freshman year, $3,500 for the sophomore year, and up to $5,500 per year for the junior and senior years. Graduate students can borrow up to $18,500 per year.

Federal Perkins loans

The Federal Perkins Loan is another federally funded loan based on need. Undergraduates can borrow up to $3,000 per year, while graduate students can borrow $5,000. The interest rate is only 5% and interest does not accrue while the student is in school. Repayment begins nine months after leaving school and can take up to 10 years.

PLUS loans by Sallie Mae

Sallie Mae offers a Parent Loan for Undergraduate Students (PLUS), which is available to parents regardless of income or assets. PLUS funds cover the total cost of education including tuition, room and board, books and supplies, transportation, and living expenses. The loan covers the entire cost of the student's education minus other aid received. The interest rate is variable, based on the 91-day, T-bill rate plus 3.10% for a maximum of 9%.

Non-need based loans are also available. Many commercial banks make loans to parents of college-age dependents without regard to financial need. The interest rate varies according to the prime-lending rate. However, repayment of principal and interest is usually required before the student graduates.

	Saving for college vehicles
	What is a mutual fund? It's an instrument that invests in many types of stocks, bonds and cash - or a combination of all three. With a mutual fund, you can spread your risk among several investments, versus just one stock. What is a home equity loan? It's a loan that uses the equity in a home as collateral. Equity is the difference between what a home owner owes to the bank or mortgage companyand what the home is worth.