How it works
College costs compound twice: tuition inflates from today's sticker price, then the inflated total must be earned by an account compounding at your return. The engine projects today's annual cost forward at the tuition-inflation rate, multiplies by the years of college to get the future total, then solves the monthly contribution a 529-style account needs at the investment return to reach it by move-in day. The two rates fight each other, and the outcome is usually a shock: a child starting in 10 years at today's $30,000-a-year school (5% tuition inflation) faces roughly $195,000 for four years, needing about $1,180 per month at a 6% return. Start early and the same total costs a fraction of that monthly number — the engine's years input is the whole game. Tuition inflation above CPI is a planning default, not a guarantee: public schools inflate slower than private, and scholarships, grants and in-state rates change the effective number.
Formula
Future cost = current cost x (1 + inflation)^years x years in college | Monthly = solve compound-growth schedule
Tips
- A 529's tax-free growth beats a taxable account for the same goal — use it.
- Start with any amount: $100 a month at age 5 beats $500 a month at age 15, every time.
- Grandparents can contribute to a 529 — check how gifts are treated in your state's plan.
- The 5% tuition inflation default is the honest planning number; use the school's actual history if you have it.
Frequently asked questions
- How much should I save for college?
- Target 50-100% of the future cost of the school type you realistically expect — community college first, then transfer, is a legitimate plan that halves the number. This calculator projects the future cost from today's sticker and your inflation assumption, so the monthly target is personal, not generic.
- What is the best account for college savings?
- A 529 plan: contributions grow tax-free and withdrawals for qualified education expenses are untaxed, and many states add a tax deduction on contributions. Coverdell accounts and custodial (UTMA) accounts are alternatives with trade-offs — 529s dominate for most families.
- How fast does tuition inflate?
- Historically 5-7% at private schools and 3-5% at public — persistently above general inflation. That gap is why a $30,000 school today is a $48,000 school in ten years, and why savings plans built on CPI miss the target.
- What if my child doesn't go to college?
- 529 funds can be redirected to another family member, used for some non-college education costs, or withdrawn with taxes and a 10% penalty on the earnings portion only. The plan is flexible enough that the 'what if' rarely justifies not saving.