The Cost of College: 5 – 10 – 15 Years from Now

college hats thrown in air
As Educational Costs Continue to Rise, Parents and Students Must Be Prepared

Saving for college can seem like an uphill battle, especially given that costs have risen an average of 5 percent annually for the last decade. Accumulated College Board data for the 2019-2020 academic year showed an average cost of $21,950 as an in-state student at a state school, and a whopping $49,870 for a private school. Doing the math easily reveals that four years at any school will cost a pretty penny, especially if your children aren’t close to college age just yet.

Assuming cost trends continue, parents and prospective students will face steep tuition bills in the future.

By the Numbers

In five years, using the data referenced above, your child’s college education will cost $112,058 for four years at a state school, and $254,593 at a private school. Of course, since many students take longer than four years to graduate, costs can easily be greater.

Looking further out, the dollar figures are even steeper for college students ten years from now. If your child enters college a decade from now, it will cost $143,018 for a state school education and $324,932 for a private school education.

Are you looking even further into the future? If your child is currently a toddler and won’t enter college until fifteen years from now, they can expect to pay $182,528 for four years at a state school and $414,704 – nearly half a million dollars – for four years of education at a private school.

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Mitigating Factors

The numbers above are a bit mind-boggling, to be sure, but a number of factors could slow the trajectory of tuition increases. For example, the COVID-19 pandemic has created the need for an unprecedented offering of distance learning at colleges across the country. The vast majority are now offering curriculums that can be completed in-person, fully-remotely, or a combination of the two. This flexibility may very well be a lasting impact of the pandemic, slowing cost increases in tuition and in room and board.

How to Plan for the Cost of College

We can’t know the future for certain, but it’s highly unlikely that we’ll see colleges slashing costs anytime soon. So, it’s key to begin saving as early as possible so that compound interest will help you stretch your money further.

A great savings tool for college costs is the 529 plan, which offers both tax and financial aid benefits. It’s a tax-advantaged account created specifically for college savings, and you can find them in nearly every state. As another benefit, though, you don’t have to choose your own state’s 529 plan, meaning you can select one that best matches your needs. It must be noted, however, that money saved in a 529 is earmarked for educational costs. Using it for other expenses will usually mean incurring a penalty from the IRS. To learn more, check out the U.S. Securities and Exchange Commission 529 plan resource here.

If a 529 isn’t right for you, there are plenty of other options available to you, some less traditional than others – yet still effective. For instance, many people have begun financing their children’s college educations with permanent life insurance policies. Since these typically include an accrued cash value, it can be used to cover college costs. One benefit of this strategy is that, since these funds are not earmarked specifically for educational costs, there is no penalty for using them for other purposes if you don’t end up needing them for college bills.

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Final Thoughts

Parents come down on various sides of the fence when it comes to whether or not to help their children pay for college. However, many feel it’s important to contribute at least partially, knowing how they personally struggled to finance their education or to pay off their student loans. Even if you feel strongly about paying your kids’ way, it’s important to take care of yourself first. This means prioritizing your retirement savings over college savings for your children.

Of course, it’s possible to accomplish both of these goals, especially if you’re working alongside a financial advisor who can help you plan and execute. At Paces Ferry, we use our professional experience and vision to guide you toward your life goals. Contact us today to learn more about how we can help you build a college savings plan that aligns with the rest of your financial and life goals, too.


Paces Ferry Wealth Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”).  This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.


Zachary Morris

Zachary Morris, CFP®

Having traveled to over 35 countries, Zach is a believer in Ralph Waldo Emerson’s statement that Life is about the journey, not the destination. Being a CERTIFIED FINANCIAL PLANNER™ provides Zach the opportunity to help clients define and realize their journey, and co-founding Paces Ferry Wealth Advisors, an independent firm, allows the freedom to define the client experience along the way.