In preparation for my first child, I started to think about saving for college. I found this neat calculator from SallieMae and tried it just to get an idea of how much will college costs 17 years from now (2024). Based on the site, the current average annual tuitions are:
- $2,191 for two-year public colleges
- $5,491 for four-year public colleges and universities (in state)
- $21,235 for four-year private colleges and universities
I plugged in the following information:
- Current Annual Cost of Attendance = $22,000
- Years Until Child Starts College = 17
- Expected Annual Cost Increase (%) = 7%
- Expected number of Years of College = 4
…and the answer is…I need to save $308,549 for ONE child. Are you freaking kidding me? I hope my kid is real smart or athletic, so he will be eligible for scholarship.
To check my number, I found another calculator from FinAid. This site also offers some more useful information that I summarized here:
- College costs increase is about twice the inflation rate; currently increases have average 5% to 8%.
- Total cost includes tuition, fees, room and board, books, travel, and incidental expenses.
- According to the College Board’s Trend in College Pricing, the 2006-2007 average annual total costs were:
- $12,294 for two-year public colleges
- $16,357 for four-year public colleges and universities (in state)
- $26,304 for four-year public colleges and universities (out of state)
- $33,301 for four-year private colleges and universities
Base on this, the total projected costs is $467,045.18. Ouch!
I even tried a more conservative numbers at $16,000 for four-year public college at 6% rate; the total projected cost is still in the mind numbing $190,000 range.
I was going to write a whole post about my strategy and plan to save for my kid’s college, but right now, I need a beer. I will have to do some more research before I can come up with some options. Once I have some more information, I will post it here.
If you have any idea, please leave a comment. I can really use some help.
Pinyo is the owner of Moolanomy Personal Finance and a Realtor® licensed in Virginia and Maryland. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, financial literacy author, and Realtor®.