Paying for college can seem pretty complicated, but what is all comes down to is that you and your child can pay for college in one of, a combination of or all of three ways: past, present or future income.

Paying for college from past income means that you have planned ahead and saved for your child’s education. Clearly, this is the preferred way. If you have been fortunate enough to build up a sizable pot of money for your family’s upcoming college expenses, then you are smart, good at generating income and probably pretty frugal too. Congratulations and let the draw-down begin!

Now, what about the other 90-plus percent of you who will be relying on present and future income of you and your child to pay for his or her college expenses? What are some smart strategies that you can employ?

Of course, maybe your income is sizable enough that you will simply write a check, once or twice yearly, to cover college expenses. Congratulations to you too, and thanks also for writing your $36.50 check to College Parents of America. Consider yourself lucky that we don’t charge on an income-contingent basis, because you should be writing us a much bigger check, don’t you think?

Seriously, you are very fortunate to be in a position to pay for college in real time and, if you don’t know already, one way to make this possible would be to consider utilizing one of the several plans that permit yearly tuition and other official school expenses to be paid in equal monthly installments, in most cases interest-free. Such plans take your big “tuition nut” and break into ten or twelve more manageable pieces.

OK, now I am still probably speaking to more than 90 percent of you when I make the point that you – and your child – are inevitably going to be also tapping into future income as part of your paying-for-college strategy and tactics. The key is to be smart as possible about the borrowing you do, and to make sure that your strategy is “last resort.” The less you – and your child – borrow, all the better.

Perhaps it goes without saying, but make sure that your borrowing is put to use for school only, and not to maintain you or your child’s “lifestyle” during a period in your lives when some sacrifice may be in order. Anything really important should have some value, and carry some burden. A college education is really important.

Borrowing money for spending beyond tuition and room & board may satisfy you – and your child’s – cravings today, but at the expense of your – and his or her – standard of living tomorrow. The penalty for “instant gratification” can be quite severe.

Let me put some numbers behind my lecturing. Say you will need $50,000 for your child’s four-year education at a public institution. If you save that amount on the front end, at something like a rate of $330 a month, or eleven bucks a day, then with an assumption of conservative interest of 4 percent compounded, your $39,000 will turn into the $50,000 you need. If you do not save, but say to yourself “I’ll just borrow the $50 grand when I need it,” then you will, at the same conservative borrowing “cost” of 4 percent, end up “paying” almost $61,000, a difference of about $22,000.

And the numbers above use some pretty modest assumptions. In fact, with more realistic assumptions of potential investment return of 8 percent, and a cost of borrowing of 7 percent, then the 10-year difference between saving and borrowing is nearly $37,000!

That is some serious money, and I hope that I have given you some serious ideas to consider wherever you may be on your “paying for college” journey.

The question of how families can finance education is one that I am wrestling with every day at College Parents of America. Part of the wrestling match involves convincing the federal government to make as much money as possible available for student aid. But beyond student aid, the question of what should be the “mix” of assets, current income and loans used as funding sources is one I know that you are – or should be – wrestling with yourselves. And another part of my job at College Parents of America is to dissect the challenges that you are facing, to break them down and to propose some solutions or at minimum, methods of better understanding.

So now you understand that paying for college can occur through the use of past, present or future income. The questions are: what are you going to do about it and how can College Parents of America and our partners be of assistance? I will explore those questions – and propose solutions – in greater depth over the weeks and months ahead.