IF YOUR HOUSEHOLD INCOME exceeds $100,000, the new tuition tax breaks won?t be worth anything to you. You?ve still got to pay for college the old-fashioned way. But in your zeal to save, don?t be seduced by one of those mutual funds that touts itself as college savings fund. You can do better investing on your own.

Take the most popular of these funds — American Century?s Twentieth Century Giftrust. This $912 million fund is set up to enable you to give the assets you invest as a gift to a minor. The advantage is that income and gains on the fund will be taxed at the child?s lower rate. (But remember, you will pay tax on annual gifts that exceed $10,000.)

What is the tax benefit worth? Since this aggressive mutual fund has virtually no yield, the big savings will come when you sell shares. And under the new budget agreement, your child would probably pay a 10% tax on long-term gains, while you would pay 20%.

However, you pay a hefty price for that benefit. Once you buy shares in Giftrust, you?re stuck in it for 10 years or until the child reaches the age of majority in his state (generally 18 or 21). Meanwhile, if the fund performance turns lousy, as it has this year, climbing just 3% compared with the S&P?s 27%, you can?t withdraw your money. Secondly, having money in a child?s name may spoil what little chance you have of getting financial aid. Federal formulas require kids to cough up 35% of their assets to cover college costs. Parents must pay just 5.7% of assets. (To find out if you are eligible for aid, use our How Much Aid Can You Expect? worksheet.)

American Century has another gimmick called the College Investment Program. It invests in the firm?s mediocre Twentieth Century Select Fund, whose 11.6% 10-year average annual return lags the S&P?s 14.6%. In this program, American Century moves some of your assets into cash each year, beginning when your child turns either 16 or 18. There is no fee charged for the rebalancing of the portfolio. But would you want to invest in Twentieth Century Select anyway?

The latest in college fund offerings is Federated Investors?s SAGE Scholars Program, which opens to the public on September 1. In this program, you buy a Federated mutual fund and pay $39.95 a year for the privilege of accruing a tuition discount at colleges participating in the program. Currently, there are 90 private schools in the program including Drexel University, Ohio Wesleyan University and Marymount College.

Your discount, which you start to earn immediately but cannot use until a year has passed, is the equivalent of 5% of your account value. It accrues annually. Say you had an account worth $10,000; you would earn a $500 tuition discount each year. The discount is capped at $50,000 to be spent over five years of college. If your child doesn?t go to one of the participating schools, you get the regular mutual fund return, but no college discount.

Is the $39.95 annual fee worth the discount? It would be if you knew your child was going to go to one of those 90 schools, which Federated hopes to increase to 300. Otherwise, you?re paying for the privilege of owning a Federated mutual fund, many of which have their own sales charges on top of that.

If you know your child is applying to some of the schools on the list, you may as well put some money into one of Federated?s back-end declining load funds. If college is just a year or two away, you can choose one of the group?s declining back-end load short-term bond funds, or money market funds. You?ll pay your $39.95 and earn your 5% discount. If you take a C share, the 1% back-end load disappears after one year though the expense ratio on some Federated funds is a fairly high 1.8%. But you'll pay your annual fee to SAGE and earn a 5% discount.