How Much You Need to Save for College

As college costs continue to rise, many parents wonder how much to save each month to prepare for future tuition bills. While there is no one-size-fits-all answer, there are benchmarks and tools that can help you set a goal that makes sense for your family. For example, using the one-third rule described below, you might aim to save between $170 and $485 each month in a 529 plan. These amounts will vary depending on the type of school you’re saving for, how much of total college costs you want to cover, and how many years you have to save.

Read more to understand how we calculated these amounts, and how you can set your own personalized monthly savings goal using our College Savings Calculator.

What percent of college costs should you plan to pay?

While many parents may want to cover all of their child’s college costs, it’s not necessary – or often practical – to aim for 100%. Most families won’t pay the full sticker price. In the 2021-22 school year, 87% of students received financial aid, usually a combination of federal grants, state and local grants, institutional aid, and federal loans. 

Saving the full cost may not be feasible for every family, especially those who have a limited number of years to save. Some parents choose to save less and have their children contribute to the costs to help them develop a sense of responsibility. A savings goal of less than 100% can still make a meaningful difference for your child and help to reduce future debt. And remember, you can always increase your monthly contribution over time. 

So if you’re not aiming to save for 100%, what’s a realistic goal? 

The One-Third Rule

The one-third rule is a useful starting point for many families. It’s based on the idea that major expenses are rarely paid all at once. Instead, people typically combine savings, current income, and borrowing to pay large expenses over time. Under this rule, one-third of college costs comes from savings, one-third from current income, and one-third from loans. While this can be a helpful benchmark, the more you save, the less you’ll need to borrow later.

How much to save each month

Let’s look at two examples to see how much the parents of a newborn baby should start saving to meet different goals ranging from 33% to 75% of expected future costs.

Saving for a Private 4-year College or University

The College Board reports that the published (sticker) price of tuition, fees, room and board for the average four-year private college for the 2024-25 academic year is $58,600. If costs continue to rise at 4% annually, the four-year sticker price of college for today’s newborn will be about $562,177. Let’s say your goal is to save one-third of this cost by the time your child is ready for college. If your 529 plan returns 6% annually, you can reach your goal with monthly contributions of $485.

In the table below we’ve used the College Savings Calculator to estimate monthly contributions required to meet different savings goals for a private university:

Saving for a Public 4-year In-State College or University

If your child attends a public university in your state, the cost drops considerably. The current cost for one year at the average public university (in-state) is $24,920. In 18 years, the four-year cost is projected to be $196,238. Using the same 529 plan as in the example above, you would need to make monthly contributions of $170 to meet your goal of covering 33% of the total costs. 

Closing the gap between college savings and costs

Admittedly, the gap between what you’ll save and the published costs is large in both scenarios: over $370,000 for private university and $130,000 for public in-state if you save about one-third. But remember that you are unlikely to pay the full sticker price.

Sallie Mae’s How America Pays for College study for the 2023-24 school year found that 27% of college cost was paid for with scholarships and grants. For the remaining costs, most parents use a combination of funding sources with 37% of funds coming from parent savings and income, 23% from loans, 11% from student income and savings, and 2% from relatives and friends.

Setting your custom savings goal

The examples above provide monthly savings contributions for a family that has 18 years to save. If you’re starting later, the amounts will be higher. The College Savings Calculator provides an easy-to-use tool to help you plan different scenarios and set a monthly goal for your specific situation.

Input your assumptions including your child’s age, the type of school you’re saving for, any current savings you have, and your expected monthly contribution. The calculator projects future college costs and estimates how much you’ll be able to cover with your savings plus scholarships and grants. 

Try different scenarios by changing the school type, or drag the slider to the percent of college costs you’ll like to cover to see how much you’ll need to start contributing.

Keep in mind our calculator assumes you’ll save with a 529 plan, which allows you to make tax-free withdrawals as long as you use the money for qualified education expenses. That means you can count on every penny of your savings in a 529 going to college costs.

Final thoughts: Start saving what you can now

College costs may seem daunting, but understanding the future cost of college and setting a realistic savings goal can help you make meaningful progress. Remember, you won’t have to cover everything from your savings. Scholarships, grants, future income, your child’s contributions, and student loans can all help close the gap.

Start with what you can afford, and adjust over time as your situation changes. The key is to take action now. With a clear plan and the right tools—like the College Savings Calculator and a 529 plan—you’ll be in a stronger position to support your child’s education and reduce their need for future loans.

Frequently Asked Questions (FAQs)

When should I start saving for college?

Ideally, you should start saving for college with a 529 plan as soon as possible. That gives your money more time to grow and will help you reach your savings goal. However, starting later in life isn’t the end of the world. 

What is a good amount of money to save up for college?

Saving one-third of your child’s projected college tuition can provide a foundation to help pay college costs, with the other two-thirds coming from other funding sources such as future income, scholarships and grants, and student loans. If you can save more, it will help you reduce the amount you have to borrow in the future.

How much does the average person save for college?

The average family sets aside about $300 for their children’s college education. Here are some more specific figures below indicating parents’ average college savings amounts as their children age: 

• Age 0 – 6: $7,929
• Age 7 – 12: $15,359
• Age 13 – 17: $27,559
• Age 18+: $27,778

How much should I save for college monthly?

You should save as much as you can afford for your child’s education without hurting your quality of life. Ideally, you should save at least $170 per month if you anticipate your child attending an in-state college (four years, public), $300 per month for an out-of-state public four-year college, and $485 per month for a private non-profit four-year college, from birth to college enrollment. This would put you on a path to saving about one-third of the expected future cost. Over time, if you are able to increase your monthly contributions, it can help you to cover a larger percent of the future cost.