In the past few weeks, I’ve spent many hours reviewing the current college funding alternatives. I’ve tried to study them all - 529 Saving Plans, 529 prepaid tuition plans, Coverdell ESA, Custodial Accounts, Life Insurance and many more.

And, I am more confused now, than before I started. Just kidding...or am I? The problem is the overwhelming complexity of all these alternatives. By doing it one way you can get a tax deduction. Other alternatives allow you to access the money tax free, as long as you use the money for college expenses. However, there are severe taxes and penalties if you don’t use the money for college.

And, many of these tax advantages may expire in 2010 unless Congress renews them. Then, there are more than 70 separate 529 plans to choose from. Almost every state has their own plan, with its own investments, regulations, fees, and pricing.

Plus, you give up control of your money, in many of these alternatives. Another big concern is the recent problems with these plans. For example, revenue hungry states are competing for 529 assets and they're layering on marketing gimmicks, restrictive tax rules and higher fees.

Sales loads have jumped from a typical 3 percent to 5.75 percent, and lofty expense ratios are increasingly common. This means that if you try to help your child out with a 'qualified' college fund, and your investments in that fund earn 10%, your net rate of return after just the sales loads will be about 7% and as low as 4.25%.

At 4.25%, you could shop around for a good municipal [tax free] bond. According to Cerulli Associates, the average 529 plan generates $1 million in state fees for every billion dollars invested.

One of the biggest problems is how these alternatives relate to the college financial aid formulas. Many Middle American families are counting on financial aid to lessen their financial burden. Most financial aid formulas will reduce the amount of free financial aid each year - by 35% of the money in the child’s name and by 5.5% of the parent’s assets.

By far, one of the simplest and least problematic alternatives (and I am a fan of simplicity), may be just over-funding a traditional cash value life insurance policy. First, there are the tax benefits. The cash values have the potential to grow on a tax-deferred basis and provide an opportunity for tax-free withdrawals.

Parents can maintain control over the accumulation values. In addition, most college aid formulas exclude assets held within cash value life insurance. This means that parents can have their policies grow tax-deferred, have tax-free access to the cash values, and not have the accumulation values reduce their financial aid.

Plus, if your child does not use this money for college (you know how fickle teenagers can be), there are no income tax penalties and you now have a tax-free retirement plan.

One of the biggest advantages of life insurance over all the other alternatives is that all of this occurs while simultaneously providing insurance protection in the event of the insured’s untimely disability or death.

Life insurance can assure the completion of a funding plan and guarantee that money will be available when your child is ready for college. I know what you're thinking...life insurance? There's a lot of bad press about cash value life insurance, most of which amounts to dishonest mud slinging. Unfortunately, there are not very many financial advisers out here telling the truth about cash value insurance.

In any case, out of the many alternatives, the simplest - but by no means the only - alternative may be cash value life insurance.