College Cost Calculator

Two compounding curves, pointing opposite ways

Published college costs have risen faster than general inflation for decades. Your savings compound too, so the question is which curve wins over your particular horizon. A 5% cost rise against a 6% return is nearly a wash — the real work is done by contributions, not by the return. That is the uncomfortable finding of most projections: starting early beats picking well.

Costs run past the last year of saving

A four-year degree is not paid on day one. Money set aside for the final year keeps compounding for three more years, and the later years cost more than the first because inflation does not stop at enrolment. This page inflates each year separately and totals them, which is why the figure is higher than four times the first-year cost.

The sticker price is rarely the price paid

Published cost is a starting point. Grant aid, scholarships and institutional discounting mean the average family pays materially less at private institutions, while in-state public tuition is lower to begin with. Setting the share you intend to cover below 100% is the honest way to model this — as is planning for the possibility that aid does not arrive.

Why a 529 rather than a plain account

Growth inside a 529 plan is not taxed while it stays there, and withdrawals are tax-free when spent on qualified education expenses. That exemption is what makes the return line above realistic: the same return in a taxable account loses a slice each year to tax on dividends and realized gains. Money taken out for anything else is taxed on the earnings portion and carries an additional penalty, so the account rewards being right about the purpose. Many states add their own deduction or credit for contributions, which this page does not attempt to model because the rules differ in every state.

Reading the shortfall honestly

A shortfall is not a failure — it is a number to plan against. The options are all visible in the inputs: save more per month, accept covering a smaller share, extend the horizon by starting now rather than next year, or change the institution assumption. Borrowing is the option that does not appear here, and it belongs on the student loan page rather than this one, because its cost lands after the degree rather than before it.

Frequently Asked Questions