Age of children
The current age of your children. This calculator is based on each child beginning their college education at age 18. The difference between their current age and 18 is the number of years you have to save.

Annual tuition
The current estimated cost of one year of tuition and books. This amount should be per child and be specific to the school they may be interested in attending. The average published costs of college, for the 2004-05 school year, including tuition, room and board, books, supplies, transportation and other personal expenses, as reported by the College Board:

U.S. Undergraduate College Costs for 2004-05 School Year
Source: Trends in College Pricing 2004, The College Board, www.collegeboard.com
TypeTuitionRoom & BoardTotalChange from 2003-04
Public 4-Year (in-state tuition)$5,132$6,222$11,3547.8%
Private 4-Year$20,082$7,434$27,5165.6%

For the purposes of this calculator all expenses are assumed to be due at the end of the year.

Room and board
The current estimated cost of one-year room and board. Like tuition and books, this amount should be per child and specific to the school they may be interested in attending. For the purposes of this calculator, all expenses are assumed to be due at the end of the year.

Education cost inflation
This is the percentage that you expect educational costs to increase per year. Data provided by The College Board's "Trends in College Pricing 2004" put tuition, room and board increases at approximately 6.5% per year, for the last ten years.

Current amount
The total amount you currently have saved for your child's (or children's) education.

Monthly contributions
The dollar amount you plan to save per month toward your child's (or children's) education. All amounts are assumed to be added to your account at the beginning of the month.

Rate of return
This is the annually compounded rate of return you expect from your investments. This will also be the rate used if you end up with a negative balance, and need to borrow money to meet your goal. The actual rate of return is largely dependant on the type of investments you select. From January 1970 to December 2004, the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11.5% per year. During this period, the highest 12-month return was 64%, and the lowest was -39%. Savings accounts at a bank pay as little as 1% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.