For the first time ever, the average cost of a four-year private college rose above $30,000 in 2006-07 to $30,367, according to a report from the College Board. Get used to this number increasing - for the 11th straight year, the average cost for total tuition, fees, room and board charges rose faster than the inflation rate. At this rate, to send a child off to private college 20 years from now will set you back a cool $73,435 per year (calculations courtesy of www.collegeboard.com).

Today many parents are looking for additional sources of cash to cover the ever-increasing cost of college education, preferably ones that do not require more loans or borrowing against home equity. More and more, they are looking toward selling annuities to help foot the bill.

An annuity is a tax-deferred contract, typically purchased through an insurance company, which allows you to accumulate funds on a tax-deferred basis, and receive income for a specified time period. Annuities are typically thought of as retirement vehicles, but according to J.G. Wentworth, the leading finance company specializing in the secondary market for annuities, they are gaining popularity as personal finance tools for other important family goals such as college.

Parents are doing all they can to help provide their children with the opportunity of a college education and minimize the debt load they will have to carry after graduation. Many grandparents are also contributing to their grandchildren's education. A recent survey by the MetLife Mature Market Institute showed that 55% of grandparents surveyed who had grandchildren under age 21 contribute in some way to their college education, with 21% setting up a fund for tuition.

"More investors who hold annuities or those who anticipate inheriting them have inquired about leveraging their assets to fund college tuitions," said Michael Vaughan, Managing Director of the J.G. Wentworth Annuity Purchase Program. "For parents able to utilize part of the income stream of an annuity to raise a lump sum of cash, it is a valuable alternative to taking out another loan or borrowing against home equity lines. For grandparents, in addition to making an important investment in the future of their grandchildren, selling all or part of an annuity can actually make their estate planning easier."

Annuities can increase the complexity of estate planning issues, because they are subject to the estate transfer tax which can deplete the annuity of almost 50% of its value. Children who inherit an annuity from a deceased parent can also inherit a hefty tax bill along with it. As the beneficiary, he or she is responsible for the taxes on the annuity's gains at their ordinary income tax rate.

Selling your annuity through a secondary market provider such as J.G. Wentworth not only provides the cash stream necessary to make a college education possible, but it can also rescue your beneficiaries from a heavy tax burden down the road.