While the price listed on a school’s website may be jaw-dropping, remember the published price is like the sticker price on a car. It doesn’t always reflect the true cost, which is referred to as the net price.
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 2024-2025, including tuition, fees, and room and board:
| Public college, in-state student | Private college | |
|---|---|---|
| Average sticker price | $24,920 | $58,600 |
| Average net price | $20,780 | $36,150 |
Source: https://research.collegeboard.org/media/pdf/Trends-in-College-Pricing-and-Student-Aid-2024-ADA.pdf
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 savings goal. 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.
Let’s look at an example using that as the savings goal. We’ll assume you have a three-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 school, in-state student | Private school, average | |
|---|---|---|
| Average 4-year cost | $223,294 | $525,081 |
| 33% savings goal | $74,431 | $175,027 |
In this hypothetical example, you’d be able to reach the 33% public school savings goal by saving $198 a month. For the private school savings goal, you’d have to save $466 a month.
Source: Calculated using Vanguard’s college cost projector. The average 4-year cost of school was calculated by using the average 2024-2025 net prices of $24,920 for a 4-year public school-in state and $58,600 for a 4-year private school, and a cost increase of 5% annually. The monthly savings amounts are based on a 6% average rate of return on your savings. This is a hypothetical example and does not represent or predict the performance of 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 dollar your child will potentially have to borrow!
Additional Insights and information to guide your journey.
View All
Gifts to an NY 529 won’t lose their shine.
If you’re lucky enough to have family members who tend to write checks or send gift cards on holidays and special occasions, you may want to talk to them about how they can have an even bigger impact on your child’s future.
NY 529 Direct Plan can make saving for college easier - even when money is tight.
When the market is going up and down, and you’re wondering what that means for your budget, it is tempting to put off saving for college. Of course you want the best for your children, but it’s hard to save for future plans when current needs are so pressing.
What college really costs–and how much should you save?
There’s no getting around it. College is expensive. It may, however, cost less than you think.