Many of you are rightly concerned about the already high and rapidly escalating costs of providing a college education to your children. Octameron Associates Inc., an Alexandria firm, specializes in publications related to financial aid for students. Up-to-date information is particularly important this year because of a change in the method of determining student eligibility for federal aid.

Octameron offers publications like "The As and Bs of Academic Scholarships," "Top Dollars for Technical Scholars" and "Do It -- Write: How to Prepare a Great College Application." My children are long past college age, but this whole series of publications looks to me like a compilation of very useful information for anyone facing the need to find the dollars for a college education.

The company offers readers a free catalogue of 1988-89 guides to financing higher education. Write to Octameron Associates, Inc., 4805 A Eisenhower Ave., Alexandria, Va. 22304, and ask for the free college money guide for 1988-89. Please mention this column in your request. My father is 62 years old, and is planning to sell his home in January. He wants to buy a smaller home, pay little or no taxes, and retain as much cash as he can to invest. He believes his house will bring $500,000. For tax purposes it cost $110,000 and has a current mortgage of $50,000. He wants to use the one-time tax exclusion. (He is married and the house is owned jointly.) How much should they spend on their next home to insure they pay no capital gains tax (assuming they don't want a mortgage)? How long a time period do they have to purchase a new home? How much money will they have to invest?

With a cost basis of $110,000, a $500,000 sale will generate a $390,000 capital gain. If they use the one-time $125,000 tax exclusion, they would have to purchase a house costing at least $265,000 to roll over the remaining profit and escape any current tax liability. (Whether they take a mortgage or not on the new home doesn't affect the numbers -- a rollover doesn't mean they must use the full proceeds to pay for the new home.)

The cash flow question works a little differently. The sale proceeds of $500,000 must be reduced by $50,000 to pay off the existing mortgage. Of the remaining $450,000, they will use $265,000 to buy the new home. Since there would be no tax liability under these circumstances, they would have $185,000 left to invest.

As to timing, they have two years before or after the sale (closing date) of the old residence to buy and occupy the new home to qualify for the rollover. My mother is 71, lives in another state, and is in relatively poor health.

Is it a good idea to purchase a parents' home, then charge them a fair market rent that could be paid from the proceeds of the sale?

If the house were titled in my name, it wouldn't be tied up in probate if she were to die; and meanwhile I could take a tax deduction for repairs.

This is often a good idea under the circumstances you describe. But in addition to charging your mother a fair rent, the purchase price has to be reasonably close to the market value of similar homes. And your mother would have to report the sale on her tax return (on Form 2119) -- although the one-time $125,000 exclusion of gain would probably eliminate any tax liability.

In addition to the cost of property taxes, repairs and maintenance, you can also claim depreciation on the property; under the new tax rules your total net loss (expenses minus rental income) is limited to $25,000 a year, but that's unlikely to be a problem in this case.

Abramson is a family financial counselor and tax adviser. Questions of general interest on tax matters, insurance, investments, estate planning and other aspects of family finances will be answered in this column. Advice cannot be given on an individual basis. Address all questions to E.M. Abramson, The Washington Post, Business & Finance News, 1150 15th St. NW, Washington, D.C. 20071.