How does the calculator project a college savings target?
It grows today's annual cost by the college cost inflation rate for each year until enrollment to get the first-year cost. Each later year of college is inflated one more year. The sum of those years is the total college cost, the savings target.
Your current savings are grown at the assumed annual return, compounded monthly, until the start of college. That projected amount is subtracted from the total cost.
The remaining gap is converted into a level monthly deposit using the sinking-fund formula. The worked example assumes deposits at the end of each month and that the whole target must be in hand when college starts; money that keeps growing during college is not counted, which makes the estimate conservative.
Cost in college year k = A × (1 + c)^(Y + k), k = 0 … K − 1 Total cost = sum of those yearly costs Gap = Total cost − S × (1 + i)^(12Y) Monthly deposit = Gap × i ÷ ((1 + i)^(12Y) − 1)
- A
- annual cost today
- c
- college cost inflation rate
- Y
- years until college
- K
- years in college
- S
- current college savings
- i
- monthly return (annual return ÷ 12)
Example: four years of college starting in 12 years
Scenario: The Nguyens' daughter is 6. A year at the school they have in mind costs $28,000 today, and they assume 5% yearly cost increases, $15,000 already saved and an illustrative 6% return.
- First-year cost$28,000 × 1.05^12 = $28,000 × 1.7958563 = $50,283.98
- All four years$50,283.98 + $52,798.18 + $55,438.08 + $58,209.99 = $216,730.23
- Current savings at enrollment$15,000 × (1.005)^144 = $15,000 × 2.0507508 = $30,761.26
- Gap$216,730.23 − $30,761.26 = $185,968.97
- Monthly deposit$185,968.97 × 0.005 ÷ (2.0507508 − 1) = $884.93
To fully fund four projected years by enrollment, the Nguyens would need to save about $884.93 a month for 12 years.
This is a sticker-price ceiling; aid, scholarships, a less expensive school or continuing to save during college would lower it.
When is a college savings projection most helpful?
Shortly after a child is born
With 18 years ahead, even a modest monthly amount compounds meaningfully. Running the numbers early shows how much time can do.
Choosing a savings target below 100%
Many families aim to cover part of the cost, expecting aid, loans or current income to handle the rest. Use the result as a ceiling and decide what share fits your budget.
Comparing types of schools
Run the calculator with the cost of an in-state public school and again for a private school to see how the target and monthly amount change.
Checking progress each year
Update current savings and years until college annually. If the monthly figure is rising, costs or returns are running behind your assumptions.
What mistakes lead to unrealistic college savings plans?
Using tuition alone
Room, board, books and fees can match or exceed tuition. A school's full cost of attendance gives a more complete annual figure.
Ignoring cost inflation
Setting inflation to zero makes the goal look much smaller. College costs have often risen faster than general prices, so a realistic rate matters.
Assuming the same return close to enrollment
Many plans shift toward safer investments as college nears, which tends to lower returns in later years. A slightly lower overall return gives a more cautious estimate.
Treating the result as all-or-nothing
A monthly figure that looks impossible is still useful. Saving half of it covers a meaningful share and reduces borrowing later.
How sensitive is the plan to college cost inflation?
Very. In the Nguyens' example, each one-point change in the inflation assumption moves the total four-year cost by roughly $23,000 to $30,000 and the monthly amount by more than $100.
Because the inflation assumption is uncertain, it helps to run a low and a high case and plan for a monthly amount somewhere in between, then revisit it as the enrollment date gets closer.
| College cost inflation | Total 4-year cost | Monthly savings needed |
|---|---|---|
| 3% | $167,015.85 | $648.37 |
| 4% | $190,364.32 | $759.47 |
| 5% | $216,730.23 | $884.93 |
| 6% | $246,472.43 | $1,026.46 |
Terms used on this page
- Inflation
- Inflation is the general rise in prices over time, which reduces how much a dollar can buy. In the US it is most often measured by the Consumer Price Index, published monthly by the Bureau of Labor Statistics. When your savings earn less than inflation, their purchasing power shrinks even though the dollar balance grows.
- Compound Interest
- Compound interest is interest earned or charged on both the original principal and the interest that has already built up. Each period's interest is added to the balance, so the next period's interest is a little larger. Over long stretches, compounding makes savings grow faster and unpaid debts grow faster too.
- Sinking Fund
- A sinking fund is money you set aside in regular amounts for a specific, expected expense, such as car insurance, holiday gifts or a future car repair. Unlike an emergency fund, which covers surprises, a sinking fund covers costs you can see coming. Spreading them out avoids a budget shock and keeps them off a credit card.
- Savings Rate
- Your savings rate is the percentage of your income that you save rather than spend. It is usually calculated as money saved divided by take-home pay, though some people use gross income. A higher savings rate builds emergency funds faster and shortens the time to reach long-term goals, often more than chasing a higher return.
College Savings Calculator: common questions
How much will college cost in 15 years?
Multiply today's annual cost by (1 + cost inflation)^15. At an illustrative 5% a year, costs roughly double over 15 years, since 1.05^15 is about 2.08. A $28,000 year today would be about $58,200 then, and each later year of school costs more. Enter your own figures above; the inflation assumption has a large effect on the answer.
Does the college savings calculator include financial aid?
No, it targets the full sticker cost of every year and does not subtract grants, scholarships or other aid. Many families pay less than the published price after aid, so the result works best as a ceiling. If you expect aid, you can lower the annual cost today to an estimated net price and rerun it.
What is a 529 plan and does it change the math?
A 529 plan is a state-sponsored education savings account in which earnings can grow federally tax-free and come out tax-free for qualified education expenses. This calculator does not model taxes, so in a taxable account your real growth would be lower than shown, while in a 529 the tax savings would help close the gap. Some states also offer tax breaks on contributions.
What does current savings at college start mean?
It is what the money you have already saved is projected to be worth on the first day of college at your assumed return. In the example, $15,000 grows to about $30,761.26 over 12 years at 6%. That amount is subtracted from the total cost before the monthly savings figure is calculated, which is why an early head start matters.
Is it too late to start saving for college in high school?
It is not too late, but the monthly amount will be high relative to the cost, because there is little time for growth. With only a few years, the money should usually be kept somewhere stable. Even a partial fund reduces how much the student may need to borrow, and saving can continue during the college years.
Why does each year of college cost more in the projection?
Costs keep rising while the student is enrolled. The calculator inflates the first-year cost to the start of college, then inflates each later year by one more year of cost increases. With 5% inflation, the fourth year in the example costs about $58,210 compared with $50,284 for the first. Over four years that adds up to about $15,594 more than four times the first-year price.
What annual cost should I enter for college?
Use the full cost of attendance for the type of school you have in mind: tuition and fees, housing and food, books and supplies, transportation and personal costs. Schools publish this figure. If you are unsure which school, run a lower-cost and a higher-cost option to see the range. Leave out aid at first so you can see the full price.
What return should I assume for college savings?
Use a return that matches how the money is invested and that becomes more conservative as enrollment approaches. Money needed in a few years is often moved to lower-risk options, which earn less. A single slightly lower average return gives a cautious estimate; try several values to see how much the monthly amount depends on it.
Should I save for college or for retirement first?
Many planners suggest not shortchanging retirement for college, because students can borrow for school while there are few ways to borrow for retirement. The right balance depends on your situation. This calculator shows the college side; comparing it with your retirement savings plan helps you decide how to split each month's savings.
Sources
- Compound Interest Calculator — U.S. Securities and Exchange Commission (Investor.gov). Accessed October 17, 2026.
- Federal student loan interest rates — Federal Student Aid (U.S. Department of Education). Accessed October 17, 2026.
- Topic no. 403, Interest received — Internal Revenue Service. Accessed October 17, 2026.
We cite primary sources: regulators, central-bank data and federal agencies. Worked examples on this page are our own calculations, last checked October 17, 2026. See our methodology.