Tax-free savings plans are great if you have a few thousand dollars a year to invest for your child. If you're not able to squeeze that much out of your budget, however, consider the following ways to help your child pay for college.

A 15-Year Home Mortgage

One creative way to pay for college if you don't currently have the money to do so is to buy a house (or refinance an existing house) on a 15-year mortgage when your child is born. When you pay off the house 15 years later, begin putting that “mortgage payment” into a savings account or low-risk investment fund.

The account will have 36 “mortgage payments” in it by the time the child is ready for college — an amount that, depending on your mortgage payment, could be substantial. At 5-percent interest, a $1,000-per-month “mortgage payment” into your savings account will yield $38,914.81 in three years. You can then continue using what was mortgage money for college money throughout your child's four or five years at college.

Scholarships and Grants

Scholarships range from athletic grants to academic scholarships to money that's based on geography or heritage. Peruse the many money-for-college books at your local library, and encourage your child to apply for any and every scholarship that looks appropriate.

The majority of academic scholarships now offered to college-bound seniors are based on scores received on the PSAT and SAT. Because only the best scores are reported, encourage your child to take the test early and often, perhaps even investing in a study course.

While the tests and study courses do cost money, they could add up to tens of thousands of dollars in scholarships if your child scores among the top students in the country. Some colleges even offer free tuition and fees for students who score a perfect or nearly perfect mark.

The most well-known college grant is the federal Pell Grant, which gives money (up to $4,050) directly to low-income children attending college. It does not have to be repaid, and is available only to undergraduates earning their first degree.

Federal Supplemental Educational Opportunity Grants, which range from $100 to $4,000, may also be available to low-income students.

Loans

Loans are different from scholarships and grants in that they must be repaid after the child graduates from or stops attending college. Federal student loans are usually borrowed directly from the government or from qualifying private lenders — both offer an attractive low interest rate. Many families, even those that do not appear to demonstrate much of a need, are eligible for federal student loans.

Federal Perkins Loans are borrowed directly from the school (also at a low interest rate), but are available only for low-income students. You can borrow up to $4,000 per year for undergraduate study.

Federal Family Education Loans (FFEL) and the William D. Ford Federal Direct Loan are administered by the U.S. Department of Education as either Stafford Loans or PLUS loans.

Stafford Loans are available directly to students, and may or may not be based on need. Total loans vary from $3,500 per year to $10,500 per year for undergrads. PLUS loans are available to the parents of college-bound students, but instead of being due when the child graduates, they must be repaid while the child is still in school.

Work Study and Other Jobs

A lot of students work while in college, and not only does working often not hurt the student's chances of succeeding, it can actually improve his or her chances of being hired after college! Working forces students to be disciplined, and also may provide real-life experience (especially when doing a co-op or internship) that can make a resume shine.

Here are some broad categories of work opportunities for your child:

• Work study. Federal work-study programs allow students with financial need to be employed, usually by the university or surrounding community, for a certain number of hours per week. This option is considered part of a student's financial-aid package, along with grants and loans.

• Part-time job. A student can apply for a job at the bagel shop or as a professor's assistant and is usually paid minimum wage.

• Full-time job. Your child can opt to work full time and attend school part time. Although the full-time job usually isn't professional work, the company may offer some tuition assistance or a flexible work schedule built around class schedules. Most students take six to 10 years to finish a degree while working full time.

• Co-operative education. A college co-op education alternates semesters of full-time college attendance with semesters of full-time work in the student's field of interest. The semesters of work usually pay quite well — sometimes enough to pay all of the student's college expenses, plus living expenses during the work semesters.

  Co-op positions are difficult to get, and they're demanding because the student must behave professionally during the work semesters and must take full course loads while at school. Most co-op students graduate in five years. Because of their real-life experiences, however, students who co-op are usually the first ones hired upon graduation.

• Internship. An internship is similar to a co-op, except that students usually attend their eight semesters of school like other students, interning only during summers and other school breaks. Unfortunately, some internships pay poorly or not at all, but they do provide necessary real-world job experience.