To begin to determine a your goal, estimate what the cost of a four-year college education will be by the time your child is ready to attend. Table 2 below will help you determine this cost.
TABLE 2 - Estimating Your Child's College Costs
|1.||Enter your child's age.||6|
|2.||Number of years until college; 18 minus your child's current age.||12|
Annual college costs **
1. Enter your own estimate or
**Source: The College Entrance Examination Board; approximate annual costs of public and private colleges for the school year 1993-1994. The college of your choice may be more or less expensive than the average cost noted here.
|4.||College Inflation Factors: According to the College Board, college costs are increasing at a rate of 7% per year. Refer to Table 3 for the inflation factor based on your time horizon.||2.25|
|5.||Future annual cost of 1 year of college; Line 3 x Line 4.||$15,750|
Future total cost of college:
Line 5 x number of years of college(4).
The College Inflation Factors chart below will help you determine how inflation will affect your savings. If, for instance, you have 10 years to save before your first child enters college, simply multiply the cost of college today by the inflation factor in the chart to estimate your college savings goal.
TABLE 3 - College Inflation Factors
|No. of Years Until College||Factor: Rate Of Inflation (7%)||No. of Years Until College||Factor: Rate Of Inflation (7%)|
It is important to remember that past performance does not guarantee future results.