How the projection is built
The calculator works in two stages. First it inflates today's annual cost forward to each year college will actually be attended, compounding the tuition-inflation rate you enter. A first-year bill ten years away costs much more than the same bill today, and each later year of college is dearer still because another year of inflation has passed.
Second, it works backward from that total to a savings plan. It figures the future value your account must reach and solves for the level monthly deposit that — growing at your assumed investment return — would fund each year as it comes due. The longer the runway before college starts, the more compounding does the heavy lifting and the smaller each monthly deposit needs to be.
Making sense of the two numbers
The total projected cost is the all-in, inflation-adjusted price of the whole degree in future dollars — usually a startling figure because it stacks several compounded years on top of each other.
The required monthly savings is the more actionable number: what you would set aside each month, starting now, to be on track. If it looks impossible, that is useful information early. The line chart traces how the cost of each successive college year climbs, making the effect of tuition inflation visible at a glance.
Ways to close the gap
A daunting target does not have to be met by saving alone. Families typically combine several sources:
- Start early — even a few extra years of compounding dramatically lowers the monthly figure.
- Use a tax-advantaged college savings account where available, so growth is not taxed.
- Plan for scholarships, grants, work-study and student contributions, which reduce the amount you must pre-fund.
- Revisit the assumptions yearly; tuition inflation and investment returns both drift, and the plan should follow.
A note on the assumptions
Results are only as good as the inputs. Tuition inflation has historically run well above general inflation but varies widely by school and era, and investment returns are never guaranteed. This tool is an educational planning aid, not financial advice — treat its output as a starting point and consider speaking with a qualified advisor before committing to a specific plan.
Formula
cost_y = currentAnnualCost·(1 + tuitionInflation/100)^yearsFromNow; required monthly savings solves for the level deposit whose future value funds each year as it is due.Frequently asked questions
- Why is the projected cost so much higher than today?
- Tuition compounds each year. At 5% inflation, costs roughly double every 14 years, so starting earlier means each future year is more expensive.