Project the future cost of college based on today's annual cost, years until enrollment, expected tuition inflation, and years in college.
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Projected First-Year Cost = Current Annual Cost × (1 + inflation rate)^years until enrollment. The total projected cost then compounds each subsequent year of college at the same inflation rate too, since costs keep rising while your student is enrolled, not just before.
For example, a 25,000 current annual cost with 10 years until enrollment, 5% inflation, and 4 years of college projects to roughly 40,722 in the first year and about 175,313 in total across all four years.
College tuition has historically risen faster than general consumer price inflation in many countries, so a default of around 5% is commonly used for planning purposes, higher than typical 2-3% general inflation estimates. Adjust based on the specific institution type you're planning for.
Using general inflation instead of college-specific cost inflation, which has historically run higher than the general CPI in many countries, understating the true future cost.
Planning for only the first year's projected cost instead of the full multi-year total, tuition keeps rising throughout the years a student is enrolled, not just before they start.
Ignoring likely financial aid or scholarships entirely, since this projects sticker price only, actual out-of-pocket cost for many families ends up meaningfully lower.
Use whichever most closely matches where your student is likely to attend, current annual costs vary enormously between in-state public, out-of-state public, and private institutions.
No, this projects the full sticker-price cost. Financial aid, scholarships and grants would reduce the actual amount you need to save or pay, factor those in separately.
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