Updated: Sep 05, 2023

Average Cost of College Tuition: How Much Do You Have to Save?

Find out the average cost of college tuition, in addition to room and board, so that you can estimate how much to save for your children‘s future education.
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There’s no denying the cost of getting a college degree.

As a parent, maybe you want to shield your child from the burden of student debt.

It can take graduates 10, 20, or 30 years to pay off what they owe. Student debt also makes it harder for grads to buy a house or save for retirement.

For this reason, some parents begin saving for their child’s education early. But even if you know the importance of saving early, you might not know how much to save.

Let's face it:

The cost of college will dramatically increase over the next five, 10, or 20 years.

Knowing the average cost of college tuition today can help you plan for the future.

What Is the Average Cost of College Tuition?

The cost of college varies. The amount one student pays for their education can be different from what another student pays.

According to The College Board, these are the average undergraduate costs for the 2018-2019 school year:

Average College Costs (2018-2019)

Type of School Degree Average tuition and fees Average tuition, fees, room, and board
Public, in-district 2-year $3,660 $12,320
Public, in-state 4-year $10,320 $21,370
Public, out-of-state 4-year $26,290 $37,430
Private, nonprofit 4-year $35,830 $48,510

The truth is:

Big factors are whether a student chooses an in-state or out-of-state school, or whether a student applies to a private institution or a public institution.

Some students also complete their first two years of college at a community college. Tuition is cheaper at community colleges, thus reducing the total cost of a four-year degree.

Plus, some students apply to colleges close to home. If they live at home while completing their education, they don’t have to pay room and board.

Study abroad

But what if your child is thinking about an international college? Studying abroad is a once-in-a-lifetime experience, but it’s also costly.

The price for this type of education varies.

It really depends on where they study, as well as the length of the international program.

According to the International Institute of Education, the average cost of studying abroad in another country is about $18,000 a semester, or $36,000 a year.

Future Estimates of College Tuition

Even if today’s education cost is doable, predicting how much you’ll need for your child’s future isn’t as black and white.


College expenses aren’t fixed from year-to-year, and there’s no way to know how much expenses will increase from year-to-year.

The cost might increase by 3 percent one year, and 2 percent the next year. Historically speaking, however, college costs increase about 5 percent annually.

With the help of a college affordability calculator, you can use today’s average cost of college to estimate how much you’ll need in five, 10, 15, or 20 years.

Here’s what you can expect to pay for college (tuition, room and board) per year, assuming a 5 percent annual cost increase.

Estimated future cost of college tuition (plus room and board)

Public 2-Year In-District Public 4-Year In-District Public 4-Year Out-of-State Private Non-Profit 4-Year
Estimated Cost Per Year (2024) $15,724 $27,274 $47,771 $61,912
Estimated Cost Per Year (2029) $20,068 $34,809 $60,970 $79,018
Estimated Cost Per Year (2034) $25,612 $44,427 $77,814 $100,849
Estimated Cost Per Year (2039) $32,689 $56,701 $99,313 $128,711

Practical Ways to Save for College

The rising cost of college can be intimidating, but saving now can pay off later. Here’s a look at several ways to jump-start saving for your child’s future college expenses.

1. Open a 529 Saving Plan

A 529 is a state-sponsored educational savings plan. Funds in the account can be used to pay for tuition, books, fees, and other educational expenses.

You can open an account for your own child, a grandchild, a relative, and even a friend. Depending on the plan, you’re allowed to contribute a maximum of $300,000 to $400,000 per beneficiary.

As a bonus, deposits up to $15,000 per year per beneficiary qualify for the annual gift tax exclusion. For a couple, this limit is $30,000.

The best part:

A 529 savings plan grows tax-free.

You’ll also benefit from tax-free withdrawals when you use the money for qualified educational expenses.

Abiding by the rules set by the IRS, qualified education expenses include:

  • Tuition
  • School fees
  • Books
  • Room and board
  • Computer and related peripheral equipment
  • Internet service
  • Computer software for education purposes

2. Coverdell Education Savings Account (ESA)

This is another savings account to help cover the cost of tuition, books, and other educational expenses in the future.

This is a federally-sponsored education savings account that you can open for any child under the age of 18.

Contributions are tax-deductible, with funds growing tax-free until withdrawn.

Similar to a 529 plan, withdrawals are tax-free when funds are used to pay for qualifying education expenses.

With this type of educational savings account, you can invest a maximum of $2,000 per beneficiary per year.

3. Custodial Account (UGMA/UTMA )

Custodial accounts are brokerage or savings account that an adult opens for a child under 18.

These accounts allow you to save on a child’s behalf. Once the child becomes 18 or 21, they assume ownership and control of the account.

This is an excellent option for college. There’s no limit to how much you can contribute to a custodial account. But if you contribute more than $15,000 per year per account (as of 2019), contributions are subject to federal gift tax.

If you’re a married couple filing jointly, you can contribute up to $30,000 per account per year without paying the gift tax.

Upon reaching 18 or 21, the child can use funds in the account for any purpose, including education. Just know that these accounts are not tax-deferred, so any account earnings are taxed at the child’s tax rate.

Withdrawals are also taxed at the child’s tax rate. Money in the account is an asset of the child.

Therefore, having a custodial account could impact the amount of federal student aid they’re eligible to receive—if they choose to fill out a free application for federal student aid (FAFSA).

4. High-Yield Savings Account

In addition to opening an educational savings account, you can save for college with a high-yield savings account.

These accounts have a higher interest rate than a regular savings account. This can maximize your child’s college fund. The sooner you start saving, the more cash you’ll sock away for their future.

Consider opening an online high-yield savings account. This way, the money isn’t as accessible. With the cash out-of-reach, it'll be easier to avoid frivolous withdrawals. Check out our list of Best High Yield Savings Accounts here.

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5. Series EE Savings Bond

Purchasing a savings bond in a large denomination can also help pay for future college expenses. Savings bonds are a safe, guaranteed investment that earn a fixed-rate of interest.

One option is a Series EE savings bond purchased through the Department of Treasury.

These bonds are sold at face value, and you can buy up to $10,000 in savings bond during a calendar year.

These make excellent birthday and graduation presents. And while some people use savings bonds to supplement their retirement income, they’re also used to finance education.

Series EE savings bonds earn interest for a period of 30 years.

These bonds are also guaranteed to double in value within 20 years. Interest earnings are subject to federal income tax, but may qualify for the education tax exclusion.

6. Invest

Mutual funds are another savings vehicle to pay for future college expenses. This is an investment strategy where you pool your money with other investors.

You can purchase different types of securities including stocks and bonds. There’s no limit to how much you can invest, and you can choose between different investment options.

Liquidated mutual funds can be used for college expenses. Earnings are subject to annual income tax.

Minimizing College Costs


It's just about saving for college but also reducing the cost of college too.

Using numerous ways to minimize college expenses, you can further make college more affordable.

The major takeaways include:

Start cheap

Consider spending the first two years of college in a cheaper school, such as a community college or public in-state institution.

Local schools could also eliminate the costs of boarding when the student can still live at home.

Take AP classes in high school

If your child takes AP classes in high school, they’ll earn college credit.

This can reduce the number of classes they need to take in college.

Apply for scholarships

With millions of dollars up for grabs in the form of scholarships and grants, students can get plenty of financial assistance with college tuition -- and even other education-related expenses.


Without the help of federal aid from the Department of Education or a private student loan, the rising cost of college tuition is a real concern for parents and students.

If you have multiple children attending college, saving for college may seem like an insurmountable task.

However, the sooner you start planning, the easier it’ll be to cover this expense.