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Personal Finance

Attending Harvard will cost $475,000 in 2036. Here’s how much other schools will charge

Attending Harvard will cost $475,000 in 2036. Here’s how much other schools will charge

Think college is expensive now? Then new parents will probably want to take a seat for this news.

In 2036, just 18 years from now, four years at a private university will be around $303,000, up from $167,000 today.

To get a degree at a public university you’ll need about $184,000, compared with $101,000 now.

These forecasts were provided by Wealthfront, an automated investment platform that offers college saving options. It uses Department of Education data on the current cost of schools along with expected annual inflation to come up with its projections.

Here are the estimated changes in cost over the next 18 years for six well-known schools.

(The totals include tuition, room and board, supplies and other expenses for four years at the institution).

“Some of the universities are nearly half a million dollars — people get a little bit of sticker shock,” said Kate Wauck, head of communications at Wealthfront.

“But once you have the power of knowing what cards are on the table you can start to make a plan,” she said.

Experts agree that 529 plans, tax-advantaged investment funds that can be used for education costs, are the best way for you to save for your child’s college years.

The plans are state-run, but you don’t have to open one in the state in which you live.

“The sooner they start saving, the more the earnings can compound,” said Mark Kantrowitz, a student loan expert.

If you start saving at your child’s birth, about a third of the college savings goal will come from earnings, Kantrowitz said.

“If you wait until the child enters high school, less than 10 percent will come from earnings and you will have to save six times as much per month to reach the same goal,” he said.

Despite the benefits of 529 plans, just 29 percent of parents use one to save for college, compared with 45 percent who keep their savings in a general bank account, according to Sallie Mae’s 2018 report, How America Saves for College.

Your first step in deciding on a 529 plan should be to learn if your state offers a full or partial state income tax deduction for your contribution, said Kim Lankford, contributing editor at Kiplinger’s Personal Finance, who writes about the plans.

More than half of states, plus the District of Columbia, offer such a deduction, she said — and that perk often (but not always) makes it smart to stick with your home state’s plan.

(Seven states allow you to claim a tax benefit even if you don’t contribute to your own state’s plan, according to SavingforCollege.com: Arizona, Arkansas, Kansas, Minnesota, Missouri, Montana and Pennsylvania.)

Beyond taxes, you can compare plans by their investment options and fees. “Look at what funds they’re invested in and if there are some you’re familiar with and like already,” Lankford said.

Many funds offer age-based plans, meaning the investments become less aggressive as your child’s first day at college nears. As time goes on, keep tabs on your account to make sure it’s being managed in a way you’re comfortable with.

You can get a breakdown of 529 plans at SavingForCollege.com.

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