top of page
  • Writer's pictureTeam at JointGoalsLife

College Costs in 2030: Time to Teach Your Kids How to Win the Lottery … or Take These 4 Steps

Updated: Jun 28

It’s now the end of the school year and graduation week for many families. Congrats as you celebrate your kids’ promotions to middle school and high school, and for the older kids, to college. As the pomp and circumstance starts to die down and you wipe those “empty nesting” tears away, the question starts to hit … are you ready for it?

You’re overjoyed that your kid is on track, getting straight A’s or got into the school of their choice, but in the back of your head you’re panicking. How much is tuition? Books? Room and board? It all adds up, and it’s only going to continue to get more expensive. 

This is a common problem that many parents face every year. In fact, funding kids’ education is one of the top 4 resolutions for Americans in 2024. Often, households procrastinate, but every year you wait makes the funding challenge even harder. As college expenses continue to rise, parents don’t want their kids to fully rely on student loans to cover the costs of higher education, which can delay their financial success after they graduate for years to come.

When you account for total costs, such as room and board, meals, and more, the expected costs in 2039 will be about $155,492 for a four-year, in-state public college education, $270,739 for a public, out-of-state college, and $435,486 for private college.

And with the odds of winning the lottery at one in 300 million, how do you realistically go about getting started to help your kid cover these costs? Well, the good news is that there are multiple ways to help save for your kid’s college costs, and there are also many ways to help you estimate how much you think it will cost based on how old your child is today. Read on for detailed actionable steps you can take now, or jump to the TLDR section for the summary.

1. Start with the Basics: Make a Feasible Savings Plan with the 1 / 3 Rule

Saving for education isn’t easy, and one of the things so many people fail to do is plan. Having a plan that covers all qualified higher education in place can help alleviate a lot of the stress that comes with the territory of paying for higher education costs. A great way to get started is to look at approximately how long you must save for these expenses, and then build a monthly savings line item into your budget.

Many families use what is referred to as the “1/3 Rule.” This concept is the idea that instead of paying for a major expenditure in one lump sum, they will spread the cost out over time by using multiple types of income. So, for example, to pay for a year’s worth of college expenses for you child, you might use 1/3 from what you’ve saved from a 529 Plan, 1/3 from your current income, and have the remaining 1/3 covered by a student loan. The 1/3 ratio is also just a reference point, so you can tweak these ratios to fit your needs better.  

If you aren’t sure how much money you will need to save, start with an online education calculator. Click on the link College Savings Calculator to check out an example calculator that you can use. You can find plenty of good ones online just by searching for them on your search engine if you don’t like the one that was linked to above.

Using the calculator, we can show an example. If you assume that the education cost inflation to be 3%, you don’t have anything saved currently, but are able to put $250 each month into a college savings plan and invest it at a rate of return of 7%, then you would amass over just under $100,000 over 18 years if you start saving when your child is born. To project out what you would want to save, you can just move some of the numbers around accordingly. 

If you’re starting a bit later, another example is setting your monthly contributions to be a bit higher to also get your college funds to where you want them. If your child is 10, for example, and you contribute $610 each month, with a rate of return of 7% you would still have almost $90,000 in a 529 Plan. Starting late doesn’t make it impossible, it just changes the equation on what you'll need to set aside each month.

These education calculators can help you get a better understanding of how much total costs might be, including tuition, books, room and board, food, and any other expenses that you think might arise by the time your kids are in college.

2. Save with 529 Education Plans: What are They and How can They Help?

One of the most common ways for parents to begin saving for their child’s education costs is to open a 529 Education Plan. These plans are tax-advantaged investment accounts that help you save for qualified expenses for education needs. Although the amount going into a 529 isn’t tax deductible, the earnings grow tax-deferred and are not taxed upon withdrawal when used to pay for qualified education expenses, including college costs.

While these have been traditionally used for college expenses, the guidelines on “qualified education expenses" have been broadened to include many other things other than just tuition, such as:

  • Room and Board

  • Computers and Internet costs

  • K-12 Tuition for private schools (up to $10,000 / year) 

  • Apprenticeship expenses

  • Student loans (up to $10,000 / year).

Just be warned that since 529 Education Plans are designed to cover education expenses only, there are penalties for using the money for non-qualified purchases (so anything not mentioned above).

It’s also important to mention that once you open a 529 account and begin depositing money into it, you need to make sure that you are actually investing the money so that it grows tax-free over time. Opening the account is step one. Funding the account is step two. Picking an asset or assets to invest in over time to grow is step three. If you aren’t sure where to start, the Certified Financial Planners at can help you make a plan to succeed.

3. Tap Grants & Scholarships

What’s better than using your own money to pay for your child’s education? Using someone else’s money. And no, we’re not talking about taking out loans (at least not yet). We’re talking about checking on your child’s eligibility to get access to federal and state level grants that can help assist with paying for college. You can check out if your child qualifies by filling out the Free Application for Federal Student Aid, or FAFSA forms, which we’ll discuss further down in the article. 

Outside of grants, scholarships are another way to help get portions (or all) of your child’s college costs paid for. Every year, thousands of scholarships go unused because students don’t apply to them.

In fact, the U.S. Department of Education awards around $46 billion in scholarship money annually, with the average scholarship for 4-year institutions being $14,890 for first-time undergraduates.

There are countless scholarships offered at every level. Local high schools offer them to graduating seniors, your state offers them, and even private companies of all sizes offer scholarships for those wanting to attend a college.


4. Fund the Rest with Student Loans & Other Programs

Student Loans

Nobody likes talking about it, but student loans can be another way to help cover the gap in any remaining costs for higher education. Using financial aid in the form of a student loan is one of the more common ways of making sure that your child can go to college and obtain their degree. In most cases, these loans will have federally subsidized interest rates for students that are dependent upon the financial needs of the family. 

To see what your child will qualify for in federal aid, you’ll need to fill out the Free Application for Federal Student Aid, or FAFSA for short. Once you complete this, you’ll be able to see what options are available to you for both loans and grants that are given out by the US government. For most households, the most common grants and loans offered are Pell Grants, Federal Direct / Stafford loans, and Plus Direct Loans. Each of these options are a bit different than the next, so make sure to take your time to review everything that you qualify for on the FAFSA website linked here so that you make the best decision for your household.

Expected Family Contribution

Financial aid availability and the Expected Family Contribution (EFC) have an inverse relationship. With a higher EFC, there is less financial aid awarded. With a lower EFC, there is more financial aid awarded. So it’s important to understand this concept so you can plan to adjust your EFC to your household situation.

Expected Family Contribution is what the federal government expects families to contribute as a percentage of their income and assets towards the cost of college for their child. There are different factors that go into this that can affect this number, such as family size, family income, and how many family members are in college at the same time. There are also special circumstances, just as unexpected job loss or the death of an income earner, so it’s important to refresh this EFC annually if there have been major changes in your household.

Parents and children are required to provide certain information on things such as income and other assets to determine the EFC. The parent’s income is based on their adjusted gross income (AGI), minus allowances for taxes and basic living expenses for non-college expenses. This new adjusted income plus any assets is what equals the parent’s expected contribution amount for college expenses.

Work / Study Programs

Just because you want to help your kids as much as possible doesn’t mean that you must carry the entire financial burden on your shoulders. Many colleges offer some form of a work / study program that allow students to have a part-time job on campus, and a portion of their paycheck gets applied directly to their tuition payments for that semester. This does differ school to school, so make sure to inquire with your kid’s college.

Part-Time Jobs

Like the one above, having a part-time job can be a good way for your child to help financially, even if it means that they are just paying for smaller monthly things while you focus on the large items such as tuition. If your kid is able to cover their own books, school supplies, and clothes, for example, this results in less things for you to have to think about while they’re in school. 

Start at a Community College

Starting out your higher education journey at a local community college is another great way to help save on college costs. As of 2023, the average cost of community college for two years to get your general education out of the way before moving on to another university was $8,220, or a little over $2,000 per semester. This is a drastically lower amount annually compared to going to a four-year college right out of high school. Saving for education isn’t easy, and sometimes the best way to hit your goal is by lowering the amount of money that you need to pay for your schooling.

Military Service

While this is a bit less traditional than everything else on this list, the various branches of the United States military offer great college perks. Bills such as the G.I Bill will help get military members and veterans up to 100% coverage on tuition costs, as well as help with additional costs such as rent and other living expenses. This might slow down your overall timeline to graduate from your university of choice but could help greatly in the long run by helping pay the way for your child’s education costs.

Tax / Employment Credits

While your child is enrolled in college, you can consider looking into utilizing tax credits offered by the federal government to help lower your taxes. Education credits such as the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC) can help lower your tax bill if you meet certain criteria. To learn more about these credits that are offered, go to the IRS website to see the specific qualifications that you need to meet in order to qualify.

Bottom Line & TLDR Action Items

Covering the cost of higher education may feel overwhelming to  many households. But it doesn’t have to be. While the costs may seem daunting, there are plenty of options available, from scholarships and grants to student loans and work-study programs. By approaching the process with a feasible plan and diligence, you can manage the investment in your child’s college education. You got this!

  1. Start with a Feasible 1 / 3 Savings Plan. Calculate the future cost and plan to save at least 1 / 3 of that amount. If you’re unsure of how to do this, check out to talk to a Certified Financial Planner to set your household up for success with a personalized Financial Action Plan.

  2. Save with a 529 Education Plan. Fund this account as best as you can, and make sure that you’re investing the money you deposit into the account, so it grows tax-free. 

  3. Tap Grants & Scholarships. Every year, thousands of scholarships go unused because students don’t apply to them. Don't lose out on the opportunity to tap those free sources of money.

  4. Fund the Rest with Student Loans & Other Programs. Using financial aid in the form of a student loan is one of the more common ways to finance a college education. Consider looking into other ways to cover the costs. Work / Study, Student Loans / Grants, and even Military Service all offer different ways to make sure the costs of higher education are covered.


bottom of page