What college will cost in 18 years
Campus Consultants Founder and President Kal Chany figured out what college will likely cost by 2030 based on inflation rates. He wrote the book, “Paying for College Without Going Broke.”
The findings? In 18 years, the average sticker price for a private university could be as much as $130,428 a year (see chart below). The situation isn’t much better if you go the public route. Sending your child to a state university could set you back at least $41,228 a year.
(Stephanie Landsman, CNBC.com)
These projections are reasonable if you consider that annual increases in college costs have averaged well over 5% in the last 30 years, almost twice the general inflation rate. However, these projections are less reliable if we are experiencing a higher education bubble that will soon deflate and prevent prices from continuing to rise at historical rates.
Here’s one hypothetical savings plan for a newborn’s future college expenses. It assumes a current annual cost of $40,00.
Future Cost of College and Savings Plan
Estimated 4 Year Cost in 2030 : $414,913.19
Monthly savings required: $821.10
How much will college cost in 18 years and what do you need to save? A 4 year degree is estimated to be priced at $414,913.19 for students enrolling in 2030 if tuition increases 5% per year. Assuming you have no current college savings, monthly deposits of $821.10 into a 529 or other college savings plan earning and after tax or tax exempt return of 7% will be necessary to achieve this balance.
One father of three young children described his challenging predicament this way.
… The kids are the greatest thing that’s ever happened to me, but they are one of the worst things that happened to my retirement plan …
Cost of College 