SlideShare a Scribd company logo
1 of 1
Download to read offline
How Much Should I Save for College?
Many families don’t know where to start when it comes to saving for college. Different schools come with different prices tags, almost all
of which continue to rise at a rate of about 5.5% annually. To help families create a plan and start saving an appropriate amount for college,
T. Rowe Price ran an analysis to determine how much families would have to contribute each month in order to cover the total costs of
a four-year in-state public university. While saving enough to cover the total costs may be difficult for many families, T. Rowe Price
recommends that they try to save enough for a “down payment” on their child’s education.
This chart shows what percentage of total college costs for a four-year education at an in-state public university a parent’s monthly savings
can cover from when they begin saving until when their child begins college.
PERCENTAGE OF COSTS COVERED FOR FOUR-YEAR IN-STATE PUBLIC UNIVERSITY
16 <1% <1% 3% 7% 12% 17% 22% 26% 31% 36% 40% 45% 50% 54% 59% 64%
15 <1 <1 5 11 16 21 27 32 38 43 48 54 59 64 70 75
14 <1 2 8 14 20 26 32 38 44 50 56 62 68 74 80 86
13 <1 4 10 17 24 30 37 43 50 57 63 70 76 83 89 96
12 <1 6 13 20 27 34 41 49 56 63 70 77 84 92 100
11 <1 7 15 23 30 38 46 54 61 69 77 84 92 100
10 1 9 17 25 34 42 50 58 67 75 83 91 100
9 2 10 19 28 37 45 54 63 72 81 89 98
8 3 12 21 30 40 49 58 67 77 86 95
7 4 13 23 33 42 52 62 72 81 91
6 4 15 25 35 45 55 66 76 86 96
5 5 16 27 37 48 58 69 80 90
4 6 17 28 39 50 61 72 83 94
3 7 18 30 41 53 64 76 87 98
2 8 20 31 43 55 67 79 91
1 8 21 33 45 57 70 82 94
0 9 22 34 47 59 72 85 97
$100 $150 $200 $250 $300 $350 $400 $450 $500 $550 $600 $650 $700 $750 $800 $850
	 Costs more than covered
	 Monthly savings needed to cover total future college costs for a child born in 2014
	 “Down payment” or about half of savings needed to cover the total cost for a child born in 2014
The future cost of college was calculated based on the 2012 total cost for the average four-year public university education ($19,093) for a family in the third
income quartile (annual household income of $65,000 - $106,000 in 2012) after the average amount of grants and scholarships for this group was subtracted,
according to the U.S. Department of Education, National Center for Education Statistics, 2011-12 National Postsecondary Student Aid Study. The cost was then
inflated at 5.5% for 18 years (per College Board data for the 10-year period ending in 2014). This assumes that college savings generate a hypothetical investment
return of 6% annually.
This example is for illustrative purposes and does not represent the return earned by any specific investment option. Investment returns will vary and could be
higher or lower than in this example.
05820-129	 5/14
Monthly Savings Amount
Child’sAge

More Related Content

Similar to How Much Should be Saved for College?

To answer many of the questions in this section, the reader should.docx
To answer many of the questions in this section, the reader should.docxTo answer many of the questions in this section, the reader should.docx
To answer many of the questions in this section, the reader should.docx
turveycharlyn
 
Kfs education
Kfs educationKfs education
Kfs education
roowah1
 
Community College Surveyof Student EngagementSt. Petersb.docx
Community College Surveyof Student EngagementSt. Petersb.docxCommunity College Surveyof Student EngagementSt. Petersb.docx
Community College Surveyof Student EngagementSt. Petersb.docx
mccormicknadine86
 

Similar to How Much Should be Saved for College? (20)

To answer many of the questions in this section, the reader should.docx
To answer many of the questions in this section, the reader should.docxTo answer many of the questions in this section, the reader should.docx
To answer many of the questions in this section, the reader should.docx
 
GPPSS 2011-12 Financial State of the District
GPPSS 2011-12 Financial State of the DistrictGPPSS 2011-12 Financial State of the District
GPPSS 2011-12 Financial State of the District
 
PASBO presentation
PASBO presentationPASBO presentation
PASBO presentation
 
Blog budget presentation
Blog budget presentationBlog budget presentation
Blog budget presentation
 
NSI 2014: StudentTracker and Alumni Tracker: Understanding Postsecondary Acce...
NSI 2014: StudentTracker and Alumni Tracker: Understanding Postsecondary Acce...NSI 2014: StudentTracker and Alumni Tracker: Understanding Postsecondary Acce...
NSI 2014: StudentTracker and Alumni Tracker: Understanding Postsecondary Acce...
 
Kfs education
Kfs educationKfs education
Kfs education
 
How To Afford College
How To Afford CollegeHow To Afford College
How To Afford College
 
Student Debt: Myths and Facts
Student Debt: Myths and FactsStudent Debt: Myths and Facts
Student Debt: Myths and Facts
 
Retirement 2007
Retirement 2007Retirement 2007
Retirement 2007
 
Teach sa ambassadors - 13 dec 2015 - 1
Teach sa   ambassadors - 13 dec 2015 - 1Teach sa   ambassadors - 13 dec 2015 - 1
Teach sa ambassadors - 13 dec 2015 - 1
 
TeachSA Ambassadors - 13 Dec 2015 - Part 1
TeachSA Ambassadors - 13 Dec 2015 - Part 1TeachSA Ambassadors - 13 Dec 2015 - Part 1
TeachSA Ambassadors - 13 Dec 2015 - Part 1
 
The School Voucher Audit
The School Voucher AuditThe School Voucher Audit
The School Voucher Audit
 
Private Colleges and STEM: Myths and Facts
Private Colleges and STEM: Myths and FactsPrivate Colleges and STEM: Myths and Facts
Private Colleges and STEM: Myths and Facts
 
Community College Surveyof Student EngagementSt. Petersb.docx
Community College Surveyof Student EngagementSt. Petersb.docxCommunity College Surveyof Student EngagementSt. Petersb.docx
Community College Surveyof Student EngagementSt. Petersb.docx
 
School report card src 2020 2021
School report card src 2020 2021School report card src 2020 2021
School report card src 2020 2021
 
Shen
ShenShen
Shen
 
South Central Pennsylvania school performance profiles 2012 13
South Central Pennsylvania school performance profiles 2012 13South Central Pennsylvania school performance profiles 2012 13
South Central Pennsylvania school performance profiles 2012 13
 
Counting Correctly v2
Counting Correctly v2Counting Correctly v2
Counting Correctly v2
 
Highlights: 2016 Enrollment Estimates
Highlights: 2016 Enrollment EstimatesHighlights: 2016 Enrollment Estimates
Highlights: 2016 Enrollment Estimates
 
"Advancing Equitable School Funding" - Presentation to the NASBE Legislative ...
"Advancing Equitable School Funding" - Presentation to the NASBE Legislative ..."Advancing Equitable School Funding" - Presentation to the NASBE Legislative ...
"Advancing Equitable School Funding" - Presentation to the NASBE Legislative ...
 

More from T. Rowe Price

More from T. Rowe Price (20)

14th Annual Parents, Kids & Money Survey
14th Annual Parents, Kids & Money Survey14th Annual Parents, Kids & Money Survey
14th Annual Parents, Kids & Money Survey
 
T. Rowe Price’s 13th Annual Parent, Kids & Money Survey
T. Rowe Price’s 13th Annual Parent, Kids & Money SurveyT. Rowe Price’s 13th Annual Parent, Kids & Money Survey
T. Rowe Price’s 13th Annual Parent, Kids & Money Survey
 
T. Rowe Price's 12th Annual Parents, Kids & Money Survey
T. Rowe Price's 12th Annual Parents, Kids & Money SurveyT. Rowe Price's 12th Annual Parents, Kids & Money Survey
T. Rowe Price's 12th Annual Parents, Kids & Money Survey
 
T. Rowe Price's 11th Annual Parents, Kids & Money Survey--College Savings Res...
T. Rowe Price's 11th Annual Parents, Kids & Money Survey--College Savings Res...T. Rowe Price's 11th Annual Parents, Kids & Money Survey--College Savings Res...
T. Rowe Price's 11th Annual Parents, Kids & Money Survey--College Savings Res...
 
T. Rowe Price's 11th Annual Parents, Kids & Money Survey
T. Rowe Price's 11th Annual Parents, Kids & Money SurveyT. Rowe Price's 11th Annual Parents, Kids & Money Survey
T. Rowe Price's 11th Annual Parents, Kids & Money Survey
 
T. Rowe Price's 10th Annual Parents, Kids & Money Survey – Holiday Spending
T. Rowe Price's 10th Annual Parents, Kids & Money Survey – Holiday Spending T. Rowe Price's 10th Annual Parents, Kids & Money Survey – Holiday Spending
T. Rowe Price's 10th Annual Parents, Kids & Money Survey – Holiday Spending
 
Financial Attitudes & Behaviors Toward the Gig Economy
Financial Attitudes & Behaviors Toward the Gig EconomyFinancial Attitudes & Behaviors Toward the Gig Economy
Financial Attitudes & Behaviors Toward the Gig Economy
 
T. Rowe Price’s 10th Annual Parents, Kids & Money Survey
T. Rowe Price’s 10th Annual Parents, Kids & Money SurveyT. Rowe Price’s 10th Annual Parents, Kids & Money Survey
T. Rowe Price’s 10th Annual Parents, Kids & Money Survey
 
Retirement Savings and Spending: Generation X
Retirement Savings and Spending: Generation X Retirement Savings and Spending: Generation X
Retirement Savings and Spending: Generation X
 
T. Rowe Price Parents, Kids & Money Survey- Holiday Saving and Spending Findings
T. Rowe Price Parents, Kids & Money Survey- Holiday Saving and Spending FindingsT. Rowe Price Parents, Kids & Money Survey- Holiday Saving and Spending Findings
T. Rowe Price Parents, Kids & Money Survey- Holiday Saving and Spending Findings
 
T. Rowe Price Parents, Kids & Money Survey- College Related Findings
T. Rowe Price Parents, Kids & Money Survey- College Related FindingsT. Rowe Price Parents, Kids & Money Survey- College Related Findings
T. Rowe Price Parents, Kids & Money Survey- College Related Findings
 
Human Resources Perspective: A Survey of Larger 401(k) Plans
Human Resources Perspective: A Survey of Larger 401(k) PlansHuman Resources Perspective: A Survey of Larger 401(k) Plans
Human Resources Perspective: A Survey of Larger 401(k) Plans
 
T. Rowe Price Parents, Kids & Money Survey
T. Rowe Price Parents, Kids & Money SurveyT. Rowe Price Parents, Kids & Money Survey
T. Rowe Price Parents, Kids & Money Survey
 
T. Rowe Price: Understanding Investor Attitudes Toward Retirement
T. Rowe Price: Understanding Investor Attitudes Toward RetirementT. Rowe Price: Understanding Investor Attitudes Toward Retirement
T. Rowe Price: Understanding Investor Attitudes Toward Retirement
 
2017 Market Outlook - U.S. Equity
2017 Market Outlook - U.S. Equity2017 Market Outlook - U.S. Equity
2017 Market Outlook - U.S. Equity
 
2017 Market Outlook - Emerging Markets Debt
2017 Market Outlook - Emerging Markets Debt2017 Market Outlook - Emerging Markets Debt
2017 Market Outlook - Emerging Markets Debt
 
2017 Market Outlook - International Equity
2017 Market Outlook - International Equity 2017 Market Outlook - International Equity
2017 Market Outlook - International Equity
 
2017 Market Outlook - Global Fixed Income
2017 Market Outlook - Global Fixed Income2017 Market Outlook - Global Fixed Income
2017 Market Outlook - Global Fixed Income
 
2017 T. Rowe Price Global Economic Outlook
2017 T. Rowe Price Global Economic Outlook2017 T. Rowe Price Global Economic Outlook
2017 T. Rowe Price Global Economic Outlook
 
T. Rowe Price's 2016 Parents, Kids & Money Survey
T. Rowe Price's 2016 Parents, Kids & Money SurveyT. Rowe Price's 2016 Parents, Kids & Money Survey
T. Rowe Price's 2016 Parents, Kids & Money Survey
 

Recently uploaded

Bahawalpur Culture.pptx pptx pptx pttx pttx
Bahawalpur Culture.pptx pptx pptx pttx pttxBahawalpur Culture.pptx pptx pptx pttx pttx
Bahawalpur Culture.pptx pptx pptx pttx pttx
AbdulNasirNichari
 
NO1 Best kala jadu karne wale ka contact number kala jadu karne wale baba kal...
NO1 Best kala jadu karne wale ka contact number kala jadu karne wale baba kal...NO1 Best kala jadu karne wale ka contact number kala jadu karne wale baba kal...
NO1 Best kala jadu karne wale ka contact number kala jadu karne wale baba kal...
Amil baba
 
GLOBAL RESEARCH TREND AND FUTURISTIC RESEARCH DIRECTION VISUALIZATION OF WORK...
GLOBAL RESEARCH TREND AND FUTURISTIC RESEARCH DIRECTION VISUALIZATION OF WORK...GLOBAL RESEARCH TREND AND FUTURISTIC RESEARCH DIRECTION VISUALIZATION OF WORK...
GLOBAL RESEARCH TREND AND FUTURISTIC RESEARCH DIRECTION VISUALIZATION OF WORK...
indexPub
 
Zepto Case study(On Track to Profitability).pptx
Zepto Case study(On Track to Profitability).pptxZepto Case study(On Track to Profitability).pptx
Zepto Case study(On Track to Profitability).pptx
aryan963438
 
Rapport annuel de Encevo Group pour l'année 2023
Rapport annuel de Encevo Group pour l'année 2023Rapport annuel de Encevo Group pour l'année 2023
Rapport annuel de Encevo Group pour l'année 2023
Paperjam_redaction
 

Recently uploaded (20)

how to exchange pi coins for USD in 2024.
how to exchange pi coins for USD in 2024.how to exchange pi coins for USD in 2024.
how to exchange pi coins for USD in 2024.
 
Bahawalpur Culture.pptx pptx pptx pttx pttx
Bahawalpur Culture.pptx pptx pptx pttx pttxBahawalpur Culture.pptx pptx pptx pttx pttx
Bahawalpur Culture.pptx pptx pptx pttx pttx
 
Next Steps for Poonawalla Fincorp After Abhay Bhutada’s Shift to Non-Executiv...
Next Steps for Poonawalla Fincorp After Abhay Bhutada’s Shift to Non-Executiv...Next Steps for Poonawalla Fincorp After Abhay Bhutada’s Shift to Non-Executiv...
Next Steps for Poonawalla Fincorp After Abhay Bhutada’s Shift to Non-Executiv...
 
is pi Network coin available for sale in 2024
is pi Network coin available for sale in 2024is pi Network coin available for sale in 2024
is pi Network coin available for sale in 2024
 
20240514-Calibre-Q1-2024-Conference-Call-Presentation.pdf
20240514-Calibre-Q1-2024-Conference-Call-Presentation.pdf20240514-Calibre-Q1-2024-Conference-Call-Presentation.pdf
20240514-Calibre-Q1-2024-Conference-Call-Presentation.pdf
 
NO1 Best kala jadu karne wale ka contact number kala jadu karne wale baba kal...
NO1 Best kala jadu karne wale ka contact number kala jadu karne wale baba kal...NO1 Best kala jadu karne wale ka contact number kala jadu karne wale baba kal...
NO1 Best kala jadu karne wale ka contact number kala jadu karne wale baba kal...
 
1. Elemental Economics - Introduction to mining
1. Elemental Economics - Introduction to mining1. Elemental Economics - Introduction to mining
1. Elemental Economics - Introduction to mining
 
Economics - Development 01 _ Handwritten Notes.pdf
Economics - Development 01 _ Handwritten Notes.pdfEconomics - Development 01 _ Handwritten Notes.pdf
Economics - Development 01 _ Handwritten Notes.pdf
 
International economics – 2 classical theories of IT
International economics – 2 classical theories of ITInternational economics – 2 classical theories of IT
International economics – 2 classical theories of IT
 
GLOBAL RESEARCH TREND AND FUTURISTIC RESEARCH DIRECTION VISUALIZATION OF WORK...
GLOBAL RESEARCH TREND AND FUTURISTIC RESEARCH DIRECTION VISUALIZATION OF WORK...GLOBAL RESEARCH TREND AND FUTURISTIC RESEARCH DIRECTION VISUALIZATION OF WORK...
GLOBAL RESEARCH TREND AND FUTURISTIC RESEARCH DIRECTION VISUALIZATION OF WORK...
 
L1 2024 Prequisite QM persion milad1371.pdf
L1 2024 Prequisite QM persion milad1371.pdfL1 2024 Prequisite QM persion milad1371.pdf
L1 2024 Prequisite QM persion milad1371.pdf
 
Canvas Business Model Infographics by Slidesgo.pptx
Canvas Business Model Infographics by Slidesgo.pptxCanvas Business Model Infographics by Slidesgo.pptx
Canvas Business Model Infographics by Slidesgo.pptx
 
How to exchange my pi coins on HTX in 2024
How to exchange my pi coins on HTX in 2024How to exchange my pi coins on HTX in 2024
How to exchange my pi coins on HTX in 2024
 
Monthly Market Risk Update: May 2024 [SlideShare]
Monthly Market Risk Update: May 2024 [SlideShare]Monthly Market Risk Update: May 2024 [SlideShare]
Monthly Market Risk Update: May 2024 [SlideShare]
 
Indirect tax .pptx Supply under GST, Charges of GST
Indirect tax .pptx  Supply under GST, Charges of GSTIndirect tax .pptx  Supply under GST, Charges of GST
Indirect tax .pptx Supply under GST, Charges of GST
 
Zepto Case study(On Track to Profitability).pptx
Zepto Case study(On Track to Profitability).pptxZepto Case study(On Track to Profitability).pptx
Zepto Case study(On Track to Profitability).pptx
 
Goldamn report on India's economy in 2024
Goldamn report on India's economy in 2024Goldamn report on India's economy in 2024
Goldamn report on India's economy in 2024
 
how do i convert pi coins to usdt easily.
how do i convert pi coins to usdt easily.how do i convert pi coins to usdt easily.
how do i convert pi coins to usdt easily.
 
Managing personal finances wisely for financial stability and
Managing personal finances wisely for financial stability  andManaging personal finances wisely for financial stability  and
Managing personal finances wisely for financial stability and
 
Rapport annuel de Encevo Group pour l'année 2023
Rapport annuel de Encevo Group pour l'année 2023Rapport annuel de Encevo Group pour l'année 2023
Rapport annuel de Encevo Group pour l'année 2023
 

How Much Should be Saved for College?

  • 1. How Much Should I Save for College? Many families don’t know where to start when it comes to saving for college. Different schools come with different prices tags, almost all of which continue to rise at a rate of about 5.5% annually. To help families create a plan and start saving an appropriate amount for college, T. Rowe Price ran an analysis to determine how much families would have to contribute each month in order to cover the total costs of a four-year in-state public university. While saving enough to cover the total costs may be difficult for many families, T. Rowe Price recommends that they try to save enough for a “down payment” on their child’s education. This chart shows what percentage of total college costs for a four-year education at an in-state public university a parent’s monthly savings can cover from when they begin saving until when their child begins college. PERCENTAGE OF COSTS COVERED FOR FOUR-YEAR IN-STATE PUBLIC UNIVERSITY 16 <1% <1% 3% 7% 12% 17% 22% 26% 31% 36% 40% 45% 50% 54% 59% 64% 15 <1 <1 5 11 16 21 27 32 38 43 48 54 59 64 70 75 14 <1 2 8 14 20 26 32 38 44 50 56 62 68 74 80 86 13 <1 4 10 17 24 30 37 43 50 57 63 70 76 83 89 96 12 <1 6 13 20 27 34 41 49 56 63 70 77 84 92 100 11 <1 7 15 23 30 38 46 54 61 69 77 84 92 100 10 1 9 17 25 34 42 50 58 67 75 83 91 100 9 2 10 19 28 37 45 54 63 72 81 89 98 8 3 12 21 30 40 49 58 67 77 86 95 7 4 13 23 33 42 52 62 72 81 91 6 4 15 25 35 45 55 66 76 86 96 5 5 16 27 37 48 58 69 80 90 4 6 17 28 39 50 61 72 83 94 3 7 18 30 41 53 64 76 87 98 2 8 20 31 43 55 67 79 91 1 8 21 33 45 57 70 82 94 0 9 22 34 47 59 72 85 97 $100 $150 $200 $250 $300 $350 $400 $450 $500 $550 $600 $650 $700 $750 $800 $850 Costs more than covered Monthly savings needed to cover total future college costs for a child born in 2014 “Down payment” or about half of savings needed to cover the total cost for a child born in 2014 The future cost of college was calculated based on the 2012 total cost for the average four-year public university education ($19,093) for a family in the third income quartile (annual household income of $65,000 - $106,000 in 2012) after the average amount of grants and scholarships for this group was subtracted, according to the U.S. Department of Education, National Center for Education Statistics, 2011-12 National Postsecondary Student Aid Study. The cost was then inflated at 5.5% for 18 years (per College Board data for the 10-year period ending in 2014). This assumes that college savings generate a hypothetical investment return of 6% annually. This example is for illustrative purposes and does not represent the return earned by any specific investment option. Investment returns will vary and could be higher or lower than in this example. 05820-129 5/14 Monthly Savings Amount Child’sAge