How Much Is Enough To Save For College

College is expensive, and it's getting more and more costly as time goes on. Many students rely on financial aid of some kind or another--whether it's grants and scholarships that don't have to be paid back or federal and private loans that do. Unfortunately, those loans can end up requiring you or your child to spend years making payments. If you really want to, you can start saving now and pay for your child's education---either in full or in part. Whether your child is six years old or 16 years old, you've probably considered how you're going to pay for college.

But how do you know how much to save--especially for a child who won't be attending school for 10 years or more? The One-Third Rule Experts suggest that you should save enough money to pay for one-third of the total cost of schooling. Another third can come out of parents' income and financial aid. The last third can be borrowed. Consider that when your child reaches college age, your income will be (hopefully) quite a bit higher than it is now. That means you'll be able to share more of the burden than you think. Which School? It's hard to know how much to save when you don't know where your child will be going to school.

When your kid is still bringing home pictures of sunshine and happy people for you to stick on the fridge, it's very difficult to know whether she'll be a candidate for a private liberal arts college or if a community college will be her first choice. Many calculators are available online to help you determine how much a public education will cost versus a private one. It's up to you to figure out which one you'll save for, but you can base your decision on your own thoughts about school, which will have a strong influence on your child's decision.

If you're still not sure, base your estimate on a public school. Why? Far more students will attend a public school than a private one. What's Average? What are the average costs to attend college? According to "Trends in College Pricing" from the College Board, for the 2005-2006 school year, the average total cost to attend a two-year public college were $11,692. That includes tuition and fees, room and board, books and supplies, transportation and other expenses. The average cost for a four-year public college or university was $15,566. For private school, you can nearly double that amount for an average of $31,916.

Now, How Much Will It Increase?

According to www.finaid.com, tuition tends to increase at an average rate of 8 percent per year. So if your child will be attending school in two years, you can count on seeing average costs of about $13,637 for a two-year public school, $18,156 for a four-year public school or $37,227 for a private school. (Ouch!)

What About Graduate Programs?

This is up to you, but know that a graduate program is usually even more costly per year than an undergraduate degree. Check out the calculators and figure out the cost, and then make your decision. But know that relatively few people end up in graduate school, and there are many programs available to help students pay for this level of schooling, so you may want to just focus on saving for the undergraduate degree at this point.

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