Financial planning strategies for families who expect to pay most of their children's college costs are offered. Information on changes mandated by the 1986 Tax Reform Act is provided. Topics include: closing the gap between higher education and family savings; assessing the financial risks and rewards of investments; gifts; understanding the varied savings modes (e.g., bonds, securities, stocks); using trusts to conserve money for college; estimating the pros and cons of borrowing, establishing lines of credit; and making the most of income-shifting strategies. Additional ways to finance college include: using educational fringe benefits, making students employees or partners of a family small business, and borrowing from the parent's retirement plan. Financial strategies for the following personal circumstances are covered: young family, divorced mother, young professionals with two incomes, widowed father and independent businessman, independent professionals, and grandparents and orphaned grandchildren. Included are a glossary of financial terms, individual and gift tax tables, an interest rate and yield chart, and a need analysis form. (SW)