How much should I save for college?

Definitions

Education costs can include tuition, fees, housing, books and travel. A grant or scholarship reduces the amount to fund if its terms are met. A loan finances payments but creates a liability; it is not a discount on the education cost.

Worked example: a stated funding target

Assume your share of education costs, already expressed in future currency amounts, is 60,000. Confirmed grants cover 12,000 and existing dedicated savings are 18,000. The remaining gap is 30,000. With 60 equal monthly contributions and no assumed growth, the required contribution is 500 per month.

Formula and assumptions

Funding gap = target cost − confirmed non-repayable funding − dedicated savings. Monthly contribution = positive funding gap / months available. Here (60,000 − 12,000 − 18,000) / 60 = 500. There are no investment returns, fees, taxes, borrowing costs or withdrawals before the target date.

Limitations and next checks

This simplified example collects the fund before payments begin. Real programs have multiple payment dates and costs can change. Recheck grants and their conditions. If starting with today’s costs, state a separate inflation assumption. Avoid counting a grant both as a cost reduction and as a second receipt. Local aid and tax rules require local verification.

Sources and scope

For US aid offers, Federal Student Aid distinguishes net price from financing and recommends comparing total costs with grants and scholarships. Its US-specific rules should not be assumed to apply elsewhere.

• Federal Student Aid: evaluating aid offers

Sources checked October 30, 2026. Examples use generic currency units. Educational information, not personal financial, tax or legal advice. Seek qualified advice for decisions specific to your circumstances.

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• Model education costs and funding
• Plan monthly contributions