Baby boomers plan to pay for their children's education with cash rather than through government loan programs, a national survey said.

Only 10 percent of those surveyed by the International Association of Financial Planners said their children, who will enter college in the 1990s, expect to use loan programs, which are used by nearly half of today's college students.In 1987-88, 20,000 Utahns borrowed $54.4 million in government loans for their college education. A U.S. Department of Education study of college freshman found 45.5 percent used some form of student aid.

The IAFP survey said 49 percent of those polled would pay for their children's education through a savings plan or current earnings, with 14 percent hoping for financing from scholarships or grants. Twenty percent said their children's own savings and earnings would pay for college.

"I think people are sincere in their wish to be able to pay college costs from their own savings or earnings," said IAFP president Charles M. Finn. "But the reality is that many won't be able to save the money they hope to."

A majority (56 percent) expect their children to attend public schools, while 25 percent hope to send their children to the more expensive privately owned colleges and universities.

The 33 percent who believe their children will attend an in-state public college, over-estimated the costs by about $7,000. They anticipate paying $14,000 a year, while the projected cost is actually $7,516 - considering tuition, room and board at public schools has risen 7.2 percent annually since 1980 to $4,370 in 1987.

Meanwhile, parents planning to send their kids to a private college "grossly underestimated their costs at $18,960 a year," Finn said. Private school tuition has doubled the public institution rate, and tuition is expected to reach $29,000 annually within the next 10 years.

The telephone poll, conducted by The Gallup Organization, indicated that of the 1,300 households surveyed, 49 percent of their children will enter college within eight years and 29 percent will enroll within four years.

Finn said it is good to see 75 percent of those polled had started a savings program for college, but, he said, "The bad news is that the way they are saving their money they may not keep up with inflation."

The survey found most college savings plans (42 percent) are placed in regular passbook accounts; 19 percent in certificates of deposits, bonds and mutual funds; and 16 percent in stocks, insurance, annuities, credit union or money market accounts.

"If someone in the 28 percent tax bracket is saving in a bank passbook account that typically pays 5.25 percent interest, with inflation at four percent, he is losing money," Finn said.

Under the federal Guaranteed Student Loan program, a student can borrow up to $54,750 at 8 percent interest with repayment beginning six months after the student graduates or drops out. Two other loan programs are PLUS and Supplemental Loans for Students, each with a $20,000 limit per student.