What This Calculator Does
This calculator helps families understand the future cost of college and how much they need to save to cover a meaningful portion of the expenses. College costs have been rising faster than general inflation for decades, so planning ahead is essential.
Key Inputs Explained
- Today's Annual College Costs: Current published cost of attendance (tuition, fees, room & board) at your target schools. Use the dropdown presets for common college types.
- College Cost Increase Rate: How fast you expect college costs to rise each year. Historically, this has been around 4–6% annually. We recommend using 5% as a conservative estimate.
- Expected Attendance Duration: Number of years your child will attend college (typically 4 years for a bachelor's degree).
- Percent of Costs from Savings: What percentage of the total future cost you plan to cover from your own savings/investments. The rest may come from scholarships, grants, student loans, or current income.
- College Savings Balance Now: How much you have already saved in a 529 plan or other college savings account.
- Interest or Investment Return Rate: Expected annual return on your college savings investments (historically 5–7% for a balanced portfolio).
- Tax Rate on Returns: Your marginal tax rate on investment gains. Using tax-advantaged accounts like 529 plans can significantly reduce this rate.
- College Will Start In: How many years until your child begins college. This affects how much time you have for investments to grow.
How the Calculations Work
The calculator first projects future college costs by applying the annual cost increase rate to today's costs for each year until college starts and throughout the attendance period. It then calculates how much you need to save (considering your current savings and expected investment returns) to cover your target percentage of those future costs.
Two Result Scenarios
- Paying in Full: Shows the total projected cost if you were to cover 100% of college expenses from savings/investments.
- Partial Savings (e.g. 35%): Shows how much you need to save if you plan to cover only a portion of costs from savings, with the rest coming from other sources (scholarships, loans, etc.). This is usually the more realistic scenario.
Important Planning Tips
- Start saving early — the power of compound growth is significant over 10–18 years.
- Consider 529 college savings plans for tax advantages.
- Don't assume you'll get a lot of financial aid — plan conservatively.
- Review your savings progress annually and adjust contributions as needed.
- Remember that college costs include more than just tuition (room, board, books, transportation, etc.).