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College and University Discussion
Reply to "Just calculated projected college costs for my kid and almost vomited"
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[quote=Anonymous]It's projecting the cost of college after many years of steady inflation. That always makes numbers seem huge. For example, UMD tuition is around 11k right now. It's been rising maybe 1% per year faster than inflation over the past two decades. So if we assume UMD tuition will increase 3% per year over the next 18 years, it will be nearly 19k per year by the time your child attends. But, of course, you realize that any invested money will earn a return at higher than the inflation rate, in expectation. Therefore for all intents and purposes you can pretend inflation doesn't exist and just make sure you have enough in your 529 to cover current tuition costs. For example, I have 50k in each kid's 529. That's enough to cover 4 years UMD tuition. It's irrelevant to me how high inflation will be or what the future cost of attendance will be because the 529 will return at least the rate of inflation.[/quote]
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