The rising cost of college makes health care look like a bargain. The latest report from the College Board (www.collegeboard.com) shows 2005-2006 tuition and fees at a public university grew 7.1 percent over the previous school year, with a total cost of $5,491. Private, nonprofit university tuition and fees advanced 5.9 percent, with a total cost of $29,026. Another study suggested that, in ten years, the total cost of a four-year degree will hit $140,000 for public universities and $300,000 for private institutions. At that rate, two children (say, twins like us) would set back their parents $600,000 -- after taxes. Translated, that means Mom and Dad would have to earn more than $1 million, just to pay for college. Ouch.

David: Saving for your kids' college is great if you have the money, but it should not be your number-one priority. There are many ways to get financial aid for college -- about $129 billion is available annually -- but there is no such thing as a retirement scholarship or loan. You need to keep your eyes on that prize, then worry about college. Plus, if you save and invest enough for your retirement, chances are good you’ll leave your kids a legacy that will pay for their kids' college.

While we're at it, don't obsess over getting your kid into Harvard. Studies show that those exclusive Ivy League degrees may not buy happiness, and don't necessarily give grads a leg up careerwise. Chances are your child may be just as likely to succeed and be happy with a degree from a good state university. It's what the student puts into it and gets out of it that matters, not where she goes. And don't forget that kids can help pay their own way through college. One idea gaining favor is that kids take a year off after high school. Many experts complain that college has become a high-pressure and obligatory career mill; a year off is like pressing the 'reset' button. It also gives you and your child time to sock away extra cash.

I don't believe college tuitions will keep up their recent double-digit annual increases, because the law of supply and demand won’t allow it. More than $1 million in earnings to send two kids to a private college? Come on. If that becomes true, only the ultra wealthy will be able to afford college, and nobody wants that. Something’s gotta give.

Jonathan: Wow, Dave what college did you go to? Didn't I go there, too? While I agree that college saving should be a lower priority than retirement saving, I can’t counsel ignoring it completely. It’s the elephant in the room for most families, and with skyrocketing costs you need a plan. I’d budget $100,000 per kid for college, and that’s just for a public university.

As a former assistant dean of admissions, I know that most schools do try to separate merit from finances. Ideally, they want the best and brightest students, regardless of their ability to pay. The decision to grant or deny admission used to be totally separate from the decision to provide financial aid. In those days, many colleges were able to boast, 'We meet 100 percent of the financial need of our students.' They no longer say that. Unfortunately, I've seen that wall start to crumble as rising costs make it harder for schools to ignore a family’s financial situation. More often than you might expect, the ability to pay has entered into the admission equation. Not that admissions officers come out and ask if a student has the bucks -- but if the school's development director just happens to mention that Johnny's dad is the CEO of the Acme Global Corporation, well, that could be considered. You don’t want to be in the position of turning down an acceptance to your kid's first-choice school because you can’t foot the bill. So start saving (and see Chapter Nine)!

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The foregoing is excerpted from 'Two for the Money: The Sensible Plan for Making it All Work' by Jonathan and David Murray with Max Alexander (Avalon Publishing Group; May 2006)