'There’s a misconception that state schools are much cheaper than private schools,” says Susan Knox, author of Financial Basics: A Money-Management Guide for Students. “They are less expensive—but not as cheap as they were when parents were in college.”

College savings must be balanced with other financial goals. Says Knox, “Retirement is your No. 1 priority, but you also don’t want your kids graduating from college with a mountain of debt, so find ways to put aside money for them. Make it a family affair. This is a good opportunity to teach your children about saving for long-term goals.”

She recommends interviewing advisers about their experience in setting up plans. “Ask about financial aid options and how they will be factored into your financial plan for college savings. If their children are young, parents can invest in equities and get growth over time. As the child nears the college years, parents will need cash and can’t rely on the long-term appreciation of stocks. Then start planning as soon as possible.”