The average 4-year undergraduate degree at a state college costs $18,391 to obtain. Private schools have an even bigger sticker price, a whopping $40,917 more than double the price of the state institutions. These sky-high tuition prices rise each year at a rate that even outpaces inflation. What is a parent to do if their child doesn't get a ton of scholarship and grant money? Loans are an option, but with over a trillion dollars in student loan debt saddling families that route is the quickest way to the poor house.

Is there a better way to pay for college? You bet there is, and it's called a 529 savings plan. With a 529 savings plan, the account holder is able to deposit money and later utilize it tax free for college expenses. Every state in the union besides Alabama lets you take advantage of this.

529 savings plans are pretty straightforward but you probably have questions like: How do I set one up? And are there any fees that I should know about? Does enrolling in a 529 effect my financial aid? By utilizing the resources below you can better plan ahead for your child's college experience.

There are two types of plans: Prepaid Tuition Plan and College Savings Plan.

The Prepaid Tuition plan is great because it locks in college expenses at eligible public and private colleges and universities. They are backed/guaranteed by the state you purchased it in. The owner or recipient of the plan needs to reside in the state in which the plan was purchased. Be aware that the Prepaid Tuition plan isn't available year round and there are age and grade limits.

The College Savings plan is better when it comes to cover the maximum amount of eligible expenses. You can put your money towards tuition, room and board, fees, books and computers. The Prepaid plan only covers tuition and fees. Also, non-traditional students (i.e. not attending college right after their high school graduation) would be better suited at buying this plan. There is no age limit. Also, a lot more money can be contributed to the College Savings plan than the Prepaid variant.

Any applicable fees vary depending on the individual plans.

Need-based Aid may be affected. Scholarships and grants can still be pursued though.

So how are you paying for your college experience? Are your parents shelling out the big bucks? Let us know in the comments below.