I have been wanting a tool to demonstrate to parents the difference between saving for college vs loans. Try this calculator out and I think you will be struck by the difference in cost. You should realize that the calculation is simplistic and does not take into account opportunity costs, inflation, etc.
Before you do the savings vs. loans calculator you should use the “World’s Simplest College Calculator” which only requires the student’s age. Once again, it is simple so you should use it as a rough guide.
I have a 4 year old grandson and I have calculated his COA and come out in the $250,000 to 330,000 range for four years at a state school. The forecasts vary depending on the assumptions made. I set up an Oregon College Savings Plan based on $320,000 with the goal of providing 50%. Nathan’s parents have set up a Texas College Savings Plan so that relatives can gift to the Texas Plan. The two plans should cover 75-80% of COA so Nathan will be responsible for 20-25% and we hope that will be an incentive to work and pursue grants and scholarships.
What if Nathan wishes to attend an outstanding private University? The COA would be about double and where would the additional funding come from……………………….stay tuned.
George A. Letchworth, Ph.D.