According to The College Board, in 2021-2022 the average total charges, including tuition and fees and room and board, at public four-year institutions, were $22,690 (in-state) and $39,510 (out-of-state), and $51,690 at private non-profit four-year institutions.
Saving enough for their children’s education is a major financial concern for many
parents. With the current cost of a four-year college education reaching six figures
in some instances, your child’s college education may cost more than you expect.
This calculator is designed to help you estimate the cost of your child’s education,
based on the variables you input.
According to The College Board, over the past 10 years, the inflation rate of college tuition has been double the rate of general inflation, as measured by the CPI.
Keep in mind that the age of your child may influence how you invest and the potential return on your savings and investments.
These results show the total cost of four years of college for your child and the amount you would have to save year by year — or the lump sum amount you would need now — at the rates of return and inflation you specified. Be aware that the sooner you begin the more manageable the amount you need to save each year. Return to the input page and increase your child’s age by one year to see the cost of waiting a year to begin your college funding plan.
Total cost of your child’s education (in future dollars):
$0
Amount needed to save each year to cover the costs:
$0
Lump sum needed including the amount you have already saved to cover future college
costs: (If you had a lump sum of savings today and were able to realize your expected
rate of return, you would not need to put away additional funds.)
$0
Are you on target to meet your college savings goal? One of the factors that will
determine if you reach your goal is whether the earnings on your college fund meet
your expectations. This graph shows how much you’ll accumulate if your college fund’s
earnings meet your expectations or fall below your expectations by 2 percent. You
may be surprised by the effect of a mere 2 percent difference in your expected rate
of return. Total accumulated if earnings fall below your expectations by 2 percent:
$0.
Growth of College Savings
The information provided is not specific investment advice, a guarantee of performance, or a recommendation.
Rates of return will vary over time, particularly for long-term investments. Investments
offering the potential for higher rates of return also involve a higher degree of
risk. For simplicity the effects of taxes, fees, and expenses are not considered
in this illustration and would reduce the results shown if they were.
This hypothetical example is used for illustrative purposes only. Actual results will vary.
This information is not intended as tax, legal, investment, or retirement advice or recommendations, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek advice from an independent tax or legal professional. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.
//<![CDATA[
var Formula = 'g = 0; for (var _i = 0; _i < Math.max(0, b); _i++) { j = (((c - 0 * ((1 - Math.pow((1 + (d / 100)), -(a - 1))) / (d / 100))) / Math.pow((1 + (d / 100)), -(a - 1))) - 0 * ((1 - Math.pow((1 + (d / 100)), -(b - _i))) / (d / 100))) / Math.pow((1 + (d / 100)), -(b - _i)); g = g + j; } if (a == 0) { h = g; } else { h = -(e - g * Math.pow((1 + (f / 100)), -a)) / ((1 - Math.pow((1 + (f / 100)), -a)) / (f / 100)); } i = g * Math.pow((1 + (f / 100)), -a); k = e; l = e; m = e; s0Arr = [k]; s1Arr = [l]; s2Arr = [m]; n = Math.max(0, (f - 2) / 100); o = f / 100; p = Math.min(0.12, (f + 2) / 100); tArr = [0]; for (var _i = 1; _i <= a; _i++) { k = k * (1 + (n)) + h; l = l * (1 + (o)) + h; m = m * (1 + (p)) + h; tArr.push(_i); s0Arr.push(k); s1Arr.push(l); s2Arr.push(m); } G = g; H = h; I = i; W = tArr; X = s0Arr; Y = s1Arr; Z = s2Arr; ZZ = Z; K = k';
var Validate = function () {
this.valid = true;
var _r1 = $Gid('d').value; if (_r1 10) { alert('invalid rate entered'); $Gid('d').focus(); this.valid = false; }
var _r2 = $Gid('f').value; if (_r2 10) { alert('invalid rate entered'); $Gid('f').focus(); this.valid = false; }
return this.valid;
};
var Questions = [
new Question('The number of years until your child enters college:', null, 'a', null, null, null, null, 1, {defaultvalue: 12, slidervalues:[0,5,10,15,20]}),
new Question('The number of years your child will attend college (it may be more than four years in some cases):', null, 'b', null, null, null, null, 1, {defaultvalue: 4, slidervalues:[0,2,4,6]}),
new Question('The estimated annual cost of the college he/she will be attending (include tuition, fees, room and board, books, etc., using today’s prices):', null, 'c', null, null, null, null, 1, {defaultvalue: 25000, slidervalues:[0,25000,50000,75000,100000]}),
new Question('The rate of inflation you expect for college costs:', null, 'd', null, null, null, null, 2, {defaultvalue: 5, slidervalues:[0,2,4,6,8,10]}),
new Question('The amount you presently have saved (in both your and your child’s name) for your child’s college expenses:', null, 'e', null, null, null, null, 2, {defaultvalue: 10000, slidervalues:[0,25000,50000,75000,100000]}),
new Question('The after-tax return you expect on your investments (0% to 10%):', null, 'f', null, null, null, null, 2, {defaultvalue: 6, slidervalues:[0,2,4,6,8,10]})
];
var Answers = ['$G', '$H', '$I', '$K'];
var ChartTitle = '';
var ChartLabels = ['Years', 'Overperform by 2%', 'Expected Savings', 'Underperform by 2%'];
var ChartData = ['W', 'Z', 'Y', 'X'];
vAxisFormat = '$#,###';
hAxisTitle = 'Years';
chartLeft = 80;
initCalc();
var dd = new Date();
$Gid('this_year').innerHTML = dd.getFullYear();
//]]>
Case Studies
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