With the economy in the doldrums and the long-term outlook for the US stock market looking more restrained than it has in the recent past, parents and grandparents are asking my advice about the problems associated with paying for their children’s college education.

Fueled by a sense of desperation brought on by skyrocketing college costs, and shrinking investment accounts, too many parents are dipping into their own retirement savings in order to send their children to college.

In 2011, 5% of parents of undergraduates withdrew, or borrowed money from their 401(k) plans to pay for the cost of their children’s college education, down from 9% in 2010 but up from 4% in 2009, according to a report recently issued by Sallie Mae and Ipsos.

On average, parents shoulder the biggest share of college costs, covering 30% of such costs through their income and savings, and 7% through borrowing, the report said.

In dipping into their retirement accounts, these well-intentioned parents are unnecessarily putting their own financial security in peril and likely will be forced to postpone, or significantly downsize, their own retirement plans.

For many parents, even those who started saving for college when their children were in preschool, the prospect of paying for their children’s college education is truly daunting. In fact, based on their current and expected savings, the typical American family is on track to cover just 16% of their projected college costs, down from 24% in 2007.

Of course, much of this dilemma comes from the cost of a college education, which continues to rise sharply. Last year, in-state tuition and fees at four-year public colleges and universities increased 7.9% to $7,605, not including room and board. At four-year private institutions, it went up 4.5% from the 2009-2010 school year to $27,293, according to the College Board.

Many parents need to hear that saving for their own retirement trumps saving for college. They need to hear that it’s OK, even admirable, to expect their children to share in the sacrifices that come with paying for a college education.

So what are the options? Parents can, for example, encourage their children to attend public colleges and universities. For many students, especially those that seem to be wavering in their commitment to pursuing a higher education, community colleges are a viable, and more affordable alternative.

Yes, college education loans are still out there. But there is no getting out of paying them back somewhere down the road. You cannot simply declare bankruptcy and expect the debt to go away. Working part time is an obvious partial solution. Taking longer than four years is an option.

However, for parents and their students who discover there are literally billions of dollars available from college endowment funds, money that does not have to be paid back, its like money from God. The trick is to know where it is and how to get your hands on it.

If you are a student hoping to go to college, or a parent or grandparent of a student hoping to go to college, in fact anyone who has any relationship with a high school student, I strongly encourage you to take ten minutes and watch the presentation that appears when you click on this link. It’ll open your mind to a world that you perhaps knew about, but had no idea how to access.

COLLEGE MONEY NOW!