Saving for college can be daunting. Many parents are saving for their children’s education, but don’t know how prepared they will be for college costs in the future. Parents face the question of how much to save and which funding vehicles to use. Those with young children have uncertainty regarding what the future will look like and if their kids will attend university. We recommend reviewing college savings within the context of your financial plan, modeling out projected funding levels against education costs, and saving for a specific target.
How Much Will Education Cost?
What are the current costs for higher education? See charts below for current costs for public and private schools, as well as recent inflation rates.
When reviewing costs, consider potential financial aid available through the Free Application for Federal Student Aid (FAFSA). Many students qualify for some kind of financial aid even if their families earn a high income, as the FAFSA calculation considers the size of your family, other family members in school, and the cost of attendance. In 2021-2022, undergraduate students received an average of $15,330 in financial aid, with $10,590 coming from grants, $2,780 in federal loans, $870 in education tax credits and deductions, and $90 in Federal Work-Study. 1Encourage your child to apply for merit-based aid that is offered by the university.