The Future Cost of College: How Much Will Tuition Increase?

Paying for college — the very thought of it can be a source of stress for many parents (and grandparents). One of the biggest concerns is estimating the future cost of college education, a figure that seems to increase each year. As tuition prices rise, it’s natural to wonder how much you’ll need to save to ensure your child or grandchild can afford higher education when the time comes. While we can’t exactly predict the future cost of college, we can offer some guidelines and tools to help you plan for it.

Tuition Increases Over Time

Just as prices for homes, vehicles, and food have risen over time, so has the cost of tuition. In 2023, according to the Education Data Initiative, “The average annual cost of tuition at a public four-year college [was] 23 times higher than tuition in 1963.” Tuition prices are impacted by a number of complex factors, so some periods see a more dramatic increase than others. For instance, tuition prices increased by 52% in the 1980s!

Believe it or not, we’re currently in a period of declining tuition costs. As reported in Forbes, “Over the decade between 2013-14 and 2023-24, average inflation-adjusted tuition and fees declined by 6% at public two-year colleges and 4% at public four-year institutions.” While that’s exciting news for parents who have children in college or high school now, parents who have young children can’t count on this trend continuing. It’s a good idea to prepare for rising tuition costs.

Plan for the Future

Because tuition increases over time are unpredictable, parents and grandparents need to be strategic in their approach to saving. Here are a few guidelines: 

• Start Early: The sooner you begin saving for your child, the better. When you use the power of compounding interest, even small regular contributions can grow significantly over time.
• Open an Education Savings Account: An education savings account, like the NC 529 Plan, offers you flexible investment strategies so your money can grow faster. Better still, you won’t pay any taxes on the money those investments earn, as long as you use the funds to pay for qualified education expenses.
• Encourage Others to Contribute: One of the best features of an NC 529 Account is that others can add to your child’s education savings. When you activate your unique gifting link, you can share it with family members and friends, and they can make a gift directly to your child’s account.
• Explore Scholarship Opportunities: Encourage your child’s academic and extracurricular pursuits, especially those that could lead to scholarships or grants to help cover college tuition.

Use a College Savings Calculator

When you’re trying to figure out how much to save for college, the NC 529 College Savings Calculator is the perfect tool. Besides allowing you to estimate how much money you may need when it’s time for your child to attend college, the calculator also lets you search the actual cost of colleges your child might attend. Additionally, the calculator will take your estimated monthly savings and apply an interest rate over a set number of years to give you a projected future value of your account and how much interest you’ll earn.

Save for Tomorrow With NC 529 Today

We know it can be overwhelming to consider how much your child’s higher education will cost, but don’t let thoughts of the future cost of college stress you out. Yes, college tuition is likely to rise, but the sooner you start saving, the more your child’s college fund can grow too. So, stop worrying, and we can help you be proactive. Open an NC 529 Account today.