When I was getting ready to finance my college education, (after hitting up my parents) I looked to Federal Pell grants and the beloved FAFSA (Free Application for Federal Student Aid). But things have changed, and in the age of Facebook and online interconnectivity, it only makes sense that students are utilizing these new tools for borrowing.

Several companies have popped up in recent months that allow students to tap into cyber-resources. On Fynanz.com, students design a profile detailing goals, interests and financial need, and then non-institutional lenders can shop through profiles based on majors, academic institutions or other interests.

The terms are set by the student, who can choose to start paying it back immediately, pay only the interest, or wait up to 20 years. Rates are between 7% and 12%, a good chunk cheaper than the 16% that's more common for private loans.

GreenNote.com, which launches June 4, seeks to utilize a student's social network to solicit friends and family to contribute to a college fund. Much like Fynanz, the student creates a profile with personal details and academic interests. However, then the student invites friends and family to contribute, and hopefully, pass on the profile to other community members. There's something very encouraging about people being able to support young people they know, or who are in their circle, with small loans.

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Want to save for college, but not sure what type of account to use? State-sponsored 529 plans should definitely be your first choice. You don't have to pick one from your own state, but tax incentives might encourage you to do so. If your state doesn't off good tax incentives for colleges savings, then look for the plan with the lowest fees. Kiplinger's gives you an excellent overview of your options, as well as a state by state run down.

These state-sponsored plans can give you shelter from both federal and state income taxes, as well as give your child's grandparents a good way to chip in for their grandchild's education. In fact a grandparent can contribute up to $12,000 a year without having to worry about federal gift taxes (a couple can contribute up to $24,000 without gift taxes). If one grandchild decides not to go to college, just switch the account into the name of another child that wants to go. The money in the fund grows tax-deferred and as long as you only use it for qualified educational expenses you don't ever have to pay taxes on the gains.

You also don't have to worry about saving too much. The federal financial-aid formula assesses parent-owned accounts at 5.6%, while student savings can be assessed a whopping 20%. But, if you want to avoid taxes you must use the funds for qualified education expenses, so you don't want to save more than you think your child will need for college.

The choices can be daunting, so many people chose to work with a broker. But most states allow you to invest directly without going into a broker plan, so why pay someone a 5.75% commission when there are some excellent plans you buy directly from TIAA-CREF and Vanguard. Check out Kiplinger's state by state choices as well as its top five picks.