For a 4-year public university, plan to save $100,000–$120,000 total. For a private university, $200,000–$250,000. Starting when your child is born, that's roughly $350–$850/month depending on the school type.
College costs have been rising at 3–5% annually, outpacing general inflation. The current average costs (tuition, fees, room & board) are:
• **Public university (in-state)**: ~$25,000/year → $100,000 for 4 years • **Public university (out-of-state)**: ~$45,000/year → $180,000 for 4 years • **Private university**: ~$55,000/year → $220,000 for 4 years
If your child is a newborn, these costs will be significantly higher in 18 years due to inflation. At 4% annual increase, a $25,000/year public university will cost ~$50,000/year by the time your child enrolls.
The good news: you don't need to save 100% of the cost. Financial aid, scholarships, work-study, and student contributions can cover a significant portion. A common target is to save one-third of the projected cost, with the remaining covered by current income, financial aid, and student loans.
A 529 plan is the most tax-efficient way to save for college — contributions grow tax-free and withdrawals for qualified education expenses are tax-free.
In-state public universities cost roughly half of private universities. Community college for the first 2 years can save $30,000–$60,000. Consider all options when setting your savings target.
The average student receives ~$15,000/year in financial aid. Merit scholarships, need-based grants, and work-study can significantly reduce out-of-pocket costs. Don't assume you need to save the full sticker price.
529 plans offer tax-free growth and tax-free withdrawals for education expenses. Many states also offer a state income tax deduction for contributions. This is the most powerful college savings vehicle available.
Starting at birth gives you 18 years of compound growth. Starting when your child is 10 gives you only 8 years, requiring roughly 3x the monthly contribution for the same goal.
Use our Savings Goal Calculator to calculate your personalized answer based on your specific situation.