Calculating How Much You Need for College Savings
It’s hard to know how much money they’ll need 18 or 19 years in the future.
LA Times reports.
How to calculate the ‘magic number’ for college savings
Many new parents want to pay for their child’s college education, but it’s hard to know how much money they’ll need 18 or 19 years in the future.
With some thoughtful planning, you can come up with a reasonable estimate of your “magic number” for college savings. Following are some important considerations as you start planning:
Type of school: The cost of attendance varies greatly depending on whether it’s a two- or four-year public or private school. Costs ranged from around $11,000 to about $44,000 (including room and board) per year in 2015, according to a recent survey from the College Board.
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15 years ago my son and I had a conversation. He wanted very much to attend an out-of-state private university. I asked him about the cost of tuition and room and board. He told me and I added these together. Then I added in expenses for books, social, travel, and contingency. Very soon we were looking at a large number. I told my son, “This number is about the average household income for a family of 4 in the US. I can’t afford to pay all of it. You will have to obtain a substantial scholarship, and maybe other grants, if you want to attend your preferred college.”
My son redoubled his efforts to find scholarship money, and he was successful. I co-signed loans to make up the difference. Five years ago my financial situation had improved to the point that I could pay off his student loans. Doing so helped his credit rating and mine, and gave my son a few hundred dollars each month in additional disposable income which, to his credit, he used wisely.