Will We Ever Retire?: The College Crunch

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How best to cope? If you've taken a big hit or lost your job, go back to the financial-aid office. That's what Esther Park, 49, of Allentown, Pa., did after her husband was laid off. Now daughter Michelle can stay at Northwestern University in suburban Chicago. Originally, Esther and her husband were responsible for $23,000 of the $40,000 annual bill for tuition, room and board. The school agreed to reduce the Parks' contribution to $7,000. Another option is borrowing and giving your stocks a chance to rebound. Student-loan rates are less than 4%, the lowest ever, and home-equity loans are back near the 35-year lows seen last fall. If you stay with stocks, diversify. Look for low-fee 529 plans like the ones run by TIAA-CREF, and for safety's sake, select funds that automatically shift into conservative investments as college age approaches.

--By Daniel Kadlec. With reporting by Sean Gregory/New York, Jeffrey Ressner/Los Angeles and Leslie Whitaker/Chicago