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Are You Saving Enough For College?

Are You Saving Enough

Are you saving enough for college?   How do you know?  Do you have a budget for college?   How did you come up with the budget?  More importantly - is the budget realistic?  

Let's take a look:

Step 1:

The first step you can take is to get a high-level overview of college costs.   This isn't entirely accurate, of course, but it will give you an idea.  Let's look at a True Cost Calculator to see what colleges will cost.  We'll do this based on your family's income.

As a for instance, let's look at two schools in New Jersey, where I live.  We'll look for my son Tommy, who is a high school junior.

The College of New Jersey is a great public school.  It's competitive to get into, but has an astonishing 94% retention rate, and 4 year graduation rate of  72%. 

The screenshot below is for a family making more than $110k per year.  This suggests that we'd need $29k per year.  My budget is $30k per year, so this looks like it is within budget.  

Private Co​llege

Now let's look at a private school in New Jersey.  The results for Princeton may surprise you.

Did you know that Princeton and other Ivy league schools offer very low tuition? Their view is that if you can get to the school, they will make it affordable.   Does that surprise you?  Of course, getting accepted is the tricky part.

Private College

Let's look at another private school in New Jersey. One that more people can actually get into.    Here is a result for Monmouth University.  $37k per year.  Over budget.  

Let's look at these schools in my college database to see how they compare:

Monmouth appears to be the least desirable, based on the stats we see.  What's worth noting:

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    Monmouth's acceptance rates are 74% - quite high
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    The College of New Jersey has a 94% retention rate - incredibly high for a public school!  This means 94% of the kids come back for year 2.  No lost credits for transfers.
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    The College of New Jersey also has a 72% 4 year graduation rate.  Screamingly high for a public school
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    Princeton only accepts 6% of the students that apply.  Blimey.

So, this exercise was to show you about what colleges will cost.  Understanding what colleges cost is the best way to come up with an accurate budget.  

Net Price Calculator

To get the most accurate understanding of what you will be expected to pay, you will need to go to the college's website to use their NPC.   

Every college's calculator may ask for different amounts of information.  Understand that the more information they ask for, the more accurate your result will be.  This NPC checklist will help you gather the documents you'll need. 

How much have you saved?

Are you on track to pay your budgeted amount?  How much have you saved?   How long do you have until your children go to college?  

I suggest you go to your 529 Plan and plug the numbers into their calculator to see if you're really on track. 

The 529 plans I have for my kids are with T.Rowe Price.  I went into the calculator recently to see if I am on track.

The image on the left shows the following inputs:

  • my son is 16
  • I have a $30k per year college budget
  • I have $35k saved
  • I am saving $500 per month
  • I will add an additional $10k per year

The image on the right shows the outputs:

  • If  my inputs stay on track, I'll have $147k saved
  • college will cost $147k
  • I will be on track!

If it appears you're not on track:

It may be time to beef up the college savings.  How much can you increase monthly savings by?  Make it hurt.  What can you give up and put toward savings?   Make this a priority so your kids won't have to borrow.   Believe me, they will thank you!  

Out of State College – What You Need to Know

Does your child want to go to college in another state? This could be the most expensive ways to go.  A way that can cause your child to  take on a lot of unnecessary student debt.

But it doesn't have to be!  

Try to understand why they want to go to school in that state.  Is there a particular school they want to go to? 

Or is it that they hate the winters in New Jersey where you made them move when they were 10.  (Wait, that's my son...) Or - gasp - is it because their friend/boyfriend is going to school in that state.

My son Tommy tells me he wants to go to UT Austin (University of Texas).   We live in New Jersey.  I looked at the college database that I created and saw that out-of-state tuition at UT Austin will run about $50k per year.  Ouch.  Our budget is $30k per year.  

The reason I mention this is because it is possible to go to school in the target state, without breaking the bank.  But it may require some strategy.

Let's discuss.

There are a few ways to go about this:

  • Community College
  • State College
  • Private College
  • Military
  • Getting Residency

Let's discuss.

Community College

Community college costs vary widely in the US.  By way of example, I will use my son Tommy as an example throughout this article.   

Tommy can go to community college in Austin for a year or two.  Out-of-state community college tuition can be expensive too.  But it's a lot

less expensive than UT Austin.  

State Colleges

State colleges can be really expensive for out-of-state students.  Of course, some are more expensive than others.

Let's look at State schools in Texas to see how much it would be for Tommy to go to a school other than UT Austin.  Well, according to our $30k budget, there appear to be quite a few schools in Texas that will work.   The lease expensive among them appears to be UT Permian Basin.

Texas sate school database

Let's take another look at the database to try to see why there are such big differences.

This snapshot sows acceptance rates, retention rates, 4 year graduation rates and average SAT scores.  

I see that University of Texas Permian Basin accepts 99% of the applicants.  Wow.  It makes you wonder what the other 1% looked like!

The point is, you want to look at these things.   High retention rates mean happy students and less risk of lost courses.

So, could my Tommy go to another State University that costs about $30k out of state and has impressive stats?  


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    Acceptance rates 60% or less
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    Retention rates 50% or higher
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    4 year graduation rate as high as possible

What Texas state schools fit the criteria?  Looks like a few schools come close!  

Private Colleges

Why do so many people shy away from private colleges?  The sticker price is my guess.  Did you know that only 12% of people actually pay the sticker price?   

The truth is that private schools have a lot more latitude to give financial aid.    Even to "high income" families.  Public schools can't necessarily do that.

Of course in-state and out-of-state tuition are the same for private colleges.  

Let's look at a True Cost Calculator to see about what your family would have to pay.  This is a high-level look, but takes into account average aid given. 

You enter the state, and it brings up a list of schools.  You then click on a salary band with the drop-down menu, and it will show you what your family can expect to pay.

This True Cost Calculator isn't a substitute for actually going to SMU's website an looking at the Net Price Calculator. However it does take actual aid given into consideration.  So, it can give you an indication of what you would expect to pay.  

What you can see, is that for the salary band over $110k, students at SMU can expect to pay about $49k per year.  This is well over the $30k budget I have for Tommy.  So, this should will be off our list.

Next, we'll look at Baylor.  Baylor is in Waco.  When I look at what we'd expect to pay - with a salary band over $110k.  And look - wow, with a salary of over $110k, we'd be expected to pay only $35k per year.

That's very close to our budget.

How can Baylor afford to do this?  To give aid to 96% of students?   I read that Baylor has an endowment of over $1 billion.   They have generous alum - one of which recently gave $200 million.  

Thirdly, let's look at St Edwards, in Austin.  According to the True Cost Calulator, it will be $33k per year.  

So, now we see that the three private school would run my family $49k, $34k or $33k.

If we go back to the college database. let's look to see how  these three schools compare to each other,   As Baylor and Saint Edwards cost about the same, we can look at acceptance rates, retention rates, 4 year graduation rates.

If you decide that the private school may work, the next step is to go to the school's website to do an actual Net Price Calculator.  This will give you the most accurate cost for your family.  

Every school will have a Net Price Calculator on its website.  Try it!   You'll find that they ask for lots of information.  Information you'll find on your tax return and investment statements.    Here is a great checklist you can use.


The military is a fantastic way to get help with education costs.  I would never suggest that your child join the military to save on college costs. But if they have the desire to join, you can definitely get some help.

All branches of the military offer R.O.T.C. scholarships, so look to see what the requirements are.  

Upon looking at the Air Force and Navy, I found that the scholarships offered were for extremely technical majors - aeronautical engineering, chemical engineering.  So look to find the branch of government that will offer a scholarship that matches your child's interests.

The way the scholarships work varies, but one is that the military will pay tuition.   In the case of public/state schools, the military will pay in-state tuition. If you get a 4 years scholarship, you will give the military 8 years of service.  If you get a 2-3 year scholarship, you will give 4 years of service.

Click on the following links for more information.


Another way to get a deal on tuition would be for your child to move to the state.  They can establish residency and then get in-state tuition.

See attached for residency requirements by state.  Some states require that the student not work during the period they are establishing residency. 

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