The net price is the sticker price minus any scholarships, need-based grants, or other types of financial aid a student receives and doesn’t have to repay. When thinking about how much you may have to pay for your child’s college education, try to focus on the net price.

Here are the average costs for 2018–2019, including tuition, fees, and room and board:

 

Public college, in-state student

Private college

Average sticker price

$21,370

$48,510

Average net price

$14,880

$27,290

Source: Average price and average net price from The College Board, “Trends in College Pricing 2018.”

How much to save

College costs can be daunting for a lot of people. One strategy that can make it less overwhelming is to set a goal for saving. Perhaps it’s saving a percentage of the 4-year cost—maybe a third, or 33%—with the expectation that a combination of income during the college years and loans will cover the remainder.

So let’s look at an example using that as the savings goal. We’ll assume you have a 3-year-old daughter and haven’t started saving for her college education. You expect she’ll begin at age 18, so we’ll estimate the cost of college 15 years from now.

Projected net college prices for a 3-year-old

 

Public college, in-state student

Private college

Average 4-year cost

$133,330

$244,531

33% saving goal

$43,999

$80,695

In this example, you’d be able to reach the public school goal by saving $129 a month. For the private college goal, you’d have to save $237 a month.

Source: Calculated using Vanguard’s college savings planner. The average 4-year cost of college was calculated by using the current net prices of $14,880 for a public college and $27,290 for a private college, and a cost increase of 5% annually. The monthly savings amounts are based on a 5% average rate of return on your savings. This hypothetical example doesn’t represent the return on any particular investment and the rate is not guaranteed.

Save what you can

If saving over $100 a month isn’t realistic, save what you can. And remember—every dollar you can save is one less your child will have to borrow!

Notes:

All investing is subject to risk, including the possible loss of the money you invest.

For more information about any 529 college savings plan, contact the plan provider to obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other information; read and consider it carefully before investing. If you are not a taxpayer of the state offering the plan, consider before investing whether your or the designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. Vanguard Marketing Corporation, Distributor.