While college students are away at school struggling with tough assignments, their parents have homework of their own: figuring out how to pay for the rising cost of a college education.

For years, state schools offered middle-class students an affordable path to a college degree, but now many families fear that this cost-effective alternative is slipping out of reach. Across the country, severe budget crises are forcing double-digit tuition increases at state universities.

“Families are very anxious,” said Jim Boyle, president of College Parents of America (search), a D.C. non-profit that provides resources and information for parents.

In a report issued this month, Congress said higher education is in a crisis, with universities pricing students out of the education market.

"Parents and students simply cannot keep up with the skyrocketing cost of college tuition, which has far outpaced the rate of inflation in both good and bad economic times," Rep. Howard P. “Buck” McKeon, R-Calif., said in a statement.

But many experts counter that there is more financial aid available than ever and state schools are still a bargain compared to private colleges.

"As tax revenues decline, public colleges have searched for other sources of funding, and for many, that has led to tuition increases," said College Board (search) President Gaston Caperton. "But despite this year's increases, public colleges and universities are still a remarkable value."

For example, the average yearly 9.6 percent jump in state school tuition comes to just $356 more per year. And even with the increases, the average tuition for a four-year public college is $4,081.

California provides a good illustration of the difference state schools can make to students feeling priced out of college. Freshmen at Stanford University, a private school, will pay $28,563 for tuition this year, while its rival UC Berkeley will charge California residents only $5,585.

The schools are different, but whether the differences are worth the $23,000 price gap is perhaps the reason why experts on saving for college advise students to rethink their private school dreams. 

That’s what Donald Tetto of Mount Olive, N.J., did last year, when he was wait-listed by Brown University, his first-choice college.

Tetto was accepted at several prestigious private schools, but he chose instead to accept a generous financial aid package from Rutgers University (search ), New Jersey’s state university.

“It wasn’t worth it to him to take a loan to go to a school he wasn’t that excited about,” said Donald’s mother, Alycea Tetto.

Boyle said tuition increases have been coupled with a shift in the way financial aid is awarded. To attract top students, many state schools use the lure of merit-based financial aid, with little left over for need-based awards.

“Now that the budget pressures have hit, there is less aid available to poorer students,” Boyle said.

Yet some experts say the hype over rising college costs has distorted the real picture -- the relative affordability of many schools and the availability of financial aid.

Considering the volume of applicants and competitiveness of admissions, claims that students are being "priced out" seem dubious. Experts say that with the amount of financial aid available today -- $90 billion in 2003 -- everyone can afford to go to college. Many students and parents just don’t understand the complexities of the financial aid system, and don't take advantage of the resources.

Another factor is the misconception by many parents that they can rely on financial aid to foot the whole bill.

Mark Kantrowitz, founder of financial aid information Web site FinAid.com, said families should expect to pay one-third of tuition from savings and current income, one third from loans and one third from grants and scholarships.

It's that first one-third that people struggle with. Studies have shown that American families don't prepare sufficiently for college costs. A June 2000 study by Hart Research Associates (search) found that 50 percent of parents surveyed had saved less than $1,000 for their children's college.

"Part of the issue is that families have to think about college early on," said Boyle, adding that different families define "affordable" by different standards and sacrifices they are -- and are not -- willing to make.

"Then it becomes a value judgment, the value parents assign to a college education," Boyle said.

Additionally, most families focus on the financial aid provided by the government and the college. Meanwhile, there are millions of dollars of private scholarships awarded every year. At Web sites like Fastweb.com, students can search for thousands of scholarships.

With new laws creating tax-deferred college savings accounts and tax credits, and savings options ranging from pre-paid tuition plans to CDs indexed to college costs, parents have many options for saving. Of course, whether your kid is 6 months or 16 years old is a huge factor in what you can expect to do.

"It’s never too late to start saving for college, and it’s never too early to start looking for scholarships," Kantrowitz said.

But of all the myths and misinformation families might have about paying for college, the most dangerous is thinking that higher education is out of reach.

"It is more important than ever that we encourage our students to pursue a college education," said Caperton, who added that today's college graduate will earn $1 million more in his lifetime than his non-college counterparts.

As for student loans, interest rates are at an all-time low, and thanks to new tax laws, up to $2,500 of interest paid on student loans is tax deductible.

But the best advice to college students, Kantrowitz said, is to limit expenses during those four years of education.

"Live like a student while you're a student so you don't have to live like a student after college," he said.