College Planning

How Much Will I Need to Save for College?

Tuition and other expenses can vary greatly between colleges and even across departments in the same college. There are several resources available that help you calculate the amount you need to save.

Saving for College: What's the Magic Number?

College is often one of the largest financial hurdles families face. Part of the challenge lies in identifying the financial target when saving for college. Tuition varies by program and school, and is affected by inflation.

What's the average cost of college tuition?

According to TopUniversities.com a four year degree at a public or non-profit institution can range anywhere between $18,943 and $42,419 per year.

Those are the figures for a year of college today, but what about in the future? It's difficult to predict what prices might look like five or 10 years from now, but there are some projections based on inflation that can help.

The College Cost Calculator at BigFuture.org can be a good place to start. By plugging in the $18,943 minimum public tuition cost at a 3% inflation rate, the calculator predicts that in 10 years, the annual cost for that same college will be $25,458. In 15 years from now, that same college could cost $29,513!

Other college cost considerations

There are several other considerations to plan for that may not be reflected in tuition estimates. For example, textbooks are usually not covered by tuition. These costs can vary widely from year to year based on the requirements of specific courses. Sometimes, these costs can be mitigated by borrowing library books, but that's never a guarantee. Sometimes Professors may put together a photocopied reading package themselves, which must be purchased.

In addition, the cost of room and board is not usually reflected in the annual tuition numbers. Room and board on campus isn't necessarily cheaper than renting elsewhere. The costs can depend greatly on a student's eating habits, proximity to grocery stores, willingness to share a room, and a host of other details.

The good news about college savings plans

The good news is that it's getting easier to plan. The U.S. Department of Education runs a College Affordability and Transparency center, which requires American colleges to submit financial details. On their website you can price out colleges with some helpful search functions, and also look for financial aid resources.

Remember that you may not need to save the entirety of college costs before your kids get there. Every dollar you save helps, but paying for college can be managed with financial aid and loans. Before making your savings budget, you may want to factor in those extra sources of income. For more on this topic, see our article, “The Savings Balancing Act.”

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

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Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax‐related decisions. For information about Protective Life and its products and services, visit www.protective.com.

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Saving for College

How much is college tuition going to be when it's time to send your child to school? Because everyone's financial circumstances are different and predicting what it will costs for your child's college education isn't an exact science, the answer if different for everyone. When saving for college, you should consider the choice of college and curriculum, financial aid eligibility, financial gifts from relatives and scholarship availability. In any set of circumstances, you are better off saving for college versus doing nothing at all..

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