This calculator gives estimates for education and planning. It is not investment, tax or legal advice; for decisions about your own situation, talk to a qualified financial professional.
Planning for the cost of college
College costs have risen faster than general inflation for decades. Starting to save early lets compound growth do much of the work, and even partial savings reduce the loans your child will need later.
How the calculator works
- Future cost. Today’s yearly cost grows by the chosen education inflation rate until college starts and through each year of study. The total is the sum of the projected yearly costs.
- Target. You choose what share of that cost you want to cover.
- Current savings. What you have already saved grows at your expected return until college starts.
- Gap. The target minus the future value of your savings.
- Monthly saving. The regular monthly deposit that, growing at your expected return, fills the gap by the time college starts.
Example
With a yearly cost of $30,000 today, 10 years to go, 4 years of study and 4% yearly cost growth, the total projected cost is about $188,600. If you have $10,000 saved and expect a 6% return, it will grow to about $17,900. To cover the rest, you need to save about $1,050 a month.
What does college cost?
According to the College Board, recent average yearly budgets, including tuition, fees, housing, food, books and transportation, were close to $30,000 for in-state students at public four-year colleges and more than $60,000 at private nonprofit colleges. Grants and scholarships reduce the price many families actually pay.
Where to save
- 529 plans: earnings grow tax-free and withdrawals are tax-free for qualified education expenses, including tuition, room and board, books and computers. Many states offer a tax deduction for contributions.
- Coverdell education savings accounts: similar tax treatment with a $2,000 yearly contribution limit and income limits.
- Custodial accounts (UGMA/UTMA): flexible, but the money belongs to the child at the age of majority and counts more heavily in financial aid calculations.
- Roth IRAs: contributions can be withdrawn at any time, and the account doubles as retirement savings.
Tips
- Automate monthly contributions, even small ones.
- Ask grandparents to contribute to a 529 for birthdays and holidays.
- Shift to more conservative investments as college approaches.
- Fill out the FAFSA every year to qualify for federal aid.
Limits
Returns and cost increases are uncertain. The calculation treats all costs as due at the start of college, which is conservative because savings keep growing during the years of study.