Calculate a Savings Plan for Higher Education

Learn About Going to College

College is something many of us aspire to, and something many parents, guardians, and family members of future students support by creating college funds to help that student pay for school once the time comes. Whether you are beginning a new college savings account or are looking at ways to maximize an existing one, a Save for College Calculator can be an invaluable tool in giving you an overview of where you are and where you need to be.

To use our calculator and begin your college savings fund, please have the following information:

  1. Current Age: How old the student is today.
  2. Age at Start of College: How old you expect the student to be when they matriculate. For many college students the age will be 18, but consider another age if they plan for a gap year or two.
  3. Years of College: This number may vary based on a few factors. Many community colleges and trade schools offer 1-2 year programs resulting in associate degrees or professional certifications. Universities offer associate degrees as well, but more commonly result in four-year bachelor degrees. If your dependent plans on advanced degrees in areas like medicine or law, you may want to consider the additional cost of graduate degrees or doctoral programs. 
  4. Annual College Cost: The current cost of tuition at your school of choice, including things like room and board, fees, etc. Public versus private institutions are another consideration that can result in a wide range of costs.
  5. College Cost Inflation: The expected inflation rate for college tuition is based on historical data. Between 2001-2021, the average annual tuition increase at public four-year colleges was 5%. 
  6. Current Savings: How much you currently have saved for the student's college fund. Don't worry, if you're at $0, you are taking the right step today by being here.
  7. Monthly College Savings: Your goal amount to save each month toward the student's college fund.
  8. Expected Rate of Return: One of the most popular savings accounts for college is a 529 Plan. These state-sponsored plans grow tax-free and withdrawals are also tax-free as long as funds are used for education-related expenses such as tuition. Better yet, 529 Plans compound, meaning you'll earn interest on your original investment plus interest earned over time. 


How Much to Save for College

Leading financial experts advise that you should plan to save at least one-third of the expected college tuition per child. The remaining balance can come from sources such as financial aid or merit scholarships. Additional factors that can impact the amount you need to save include:

  • School Choice: Tuition amounts can vary significantly depending on which type of school a student hopes to attend. Private institutions are generally more expensive than public, and trade schools or community colleges are traditionally more affordable than their four-year university counterparts. 
  • Number of Students: If you have more than one dependent you will be saving for, the amount you will need to save will increase. Consider starting separate saving plans for each student to keep goals in order and to allow easy access for each student as they matriculate.

Common Questions

College is an investment in yourself and your future, but it doesn’t come cheap. Make a list of your interests and what career paths that could lead to. It may be helpful to research the earning and hiring potential of the majors you are interested in studying. Once you’ve done this, look at the colleges that offer programs in your areas of interest. Are those colleges in or out of state? What are their tuition, room and board, and meal plan costs?

Comparing your potential future salary versus the amount of student loans you may need to take out could help with your decision. Consider how long you would have to pay on your student loans for and the monthly payments.

You could also look for scholarships that might be available to help with the cost and reducing the amount of student loans you may have to take out.

College might not be the right path for everyone. If you already have a job or different career path you’re interested in that doesn’t require a college degree, it may not be worth spending the money and time to go. There are also alternatives like trade or cosmetology school that could be more aligned with someone’s interests and skills compared to a four year college. Furthermore, if you’re not sure what you want to study or do for a career path, it may be worth holding off on attending.

Some people might also not have the money to attend college and don’t want to potentially accrue a lot of debt from student loans. You could choose a different path that doesn’t require a degree or could work for a while to gain experience and save up money to attend college later. To save money, there could be the option to attend community college and transfer the credits to a four year university. You would need to check both schools requirements carefully to see if and what credits could potentially be transferred.

While the anticipation is thrilling, selecting the right college involves careful thought and planning. Here’s a breakdown of key factors to consider:

  • Cost: Evaluate tuition, housing, meal plans, and other fees.
  • Programs Offered: Ensure the college provides the majors or minors you’re interested in studying.
  • Reputation: Consider the college’s standing and credibility in your field of interest.
  • Commute or Distance from Home: Think about whether you prefer to stay close to home or embrace a new location.
  • Campus Environment and Size: Decide if you thrive in a large, bustling campus or a smaller, more intimate setting.
  • Student Life: Look into extracurricular activities, clubs, and overall campus culture.