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Help on this calculator
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Years Until College How many years until college? A typical American student enters college around age 18 so if your child is 2 years old you would have about 16 years until college.
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Current SavingsDo you currently have any money saved for college? If so how much?
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Current One Year CostsHow much does one year at this college cost today? Include fees, tuition, room and board and any other expenses related to college. Here is a breakdown of estimated expenses by school type:
- Private 4 year school: $27,500
- Public 4 year school (in-state): $13,000
- Public 4 year school (out-of-state): $19,000
- Public 2 year school: $10,500
You can also use a tool like this one at the CNN Money site that finds the current cost for a given school.
CNN Money School Specific Cost Finder -
Estimated Return on SavingsHow much do you think your savings (investments) will earn? Depending on your investements this will vary quite a bit. Don't include inflation as it's already included in the future cost of college.
6 Comments so far
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Was just looking over your new calculator and the calculated monthly savings amount seems to be off.
For instance, I ran your default settings (18yrs, $0 saved, $13000/yr, and 8%) and it told me the total cost would be $76,442 (when attending 2 years) and that I would need to save $669 a month. After doing a quick sanity check by determining that I would have saved roughly twice that amount or $144,504 ($669*12months*18years) over 18 years without interest, leads me to believe something is wrong…
@Jeff,
Thanks for the checking it. Yes, I screwed up the formula in my haste to post it to the site. I fixed it now.
Thanks
No problem…this is a pretty good calculator. It takes into account a realistic tuition inflation rate, and provides multiple results based on the number of years attending college…up to 7 years (aren't they called doctors).
Most of the other calculators I have stumbled upon are just simple future value calculations.
As far I can tell, your monthly savings amount is enough to ensure you have the total out-of-pocket costs for college in savings on the first day "junior" enters college.
If and when I setup a college savings account, I think that I am going to assume that I would continue to contribute the same or similar monthly amount through the duration of college. This would lower the monthly amount that I would have to contribute each month (but add to the duration that I make payments).
I probably will also take into account shifting my savings into more conservative investments as college approaches. This would most likely mean that my rate of return would be less than tuition increases (~6%) after "junior" begins college, and thus have to save more money before I put my assets into a conservative investment (cash–money market or CDs).
All in all, this is good tool for people to use when creating their own college savings plan.
What an eye opener! My parents paid for my college education, but that was ages ago, when it was still affordable! What do you think about college loans?
Pinky,
As a former college instructor and having spent 7 years in college myself, I'll tell you this: Too many people go to college and too many people take out debt to do so.
Many people need to look at technical education as a better alternative to college. As to the loans, I wish I would have paid my way through college, I would have finished much faster! I paid my loans off years ago but it really hurt.
Imagine spending $100,000 for college, getting out and making $25,000 and having to make payments on all that debt. You can make $25,000 a year at a grocery store or fast food restaurant.