For most families, college is a major expense that requires years of planning.

Questions to Answer for Determining College Costs

There are four key questions that will determine the future cost for college:

• State school or private school?
• If state school, in-state route of state school?
• If state school, is the student willing to start at a community college and then transfer to a 4-year school?
• If private school, is the student willing to go to a state school for the first two years before transferring to the private school for the final two years?

Calculate the Expected College Costs

After you have worked through these questions, you can make an estimate of your future costs. First you select a school or schools. Then you do a web search to find links to online college cost calculators. Typically the websites ask for information such as:

• Years until college attendance
• Years of college attendance
• Current cost of the desired university
• College cost inflation rate.

The calculator generally has a link to look up the current expense for specific schools. You can often find information about the cost inflation rate of a specific school by searching that school's website. Try a search term like “historical tuition costs” or “historical inflation of tuition costs.” If you can't access that information, enter 6% or a best guess assumption.

Ways to Limit Future Costs.

For a child born this year, costs at a state university 18 years from now may well exceed $100,000. To avoid significant debt, families may consider using one or more of these strategies to cut costs:

• Start at a community college. The first two years of most undergraduate programs are mostly dedicated to general education requirements. It is typically much less expensive to take those classes at a community college and then transfer to a larger university for the final two years. Select a community college with an existing relationship with the school where the student plans to finish.
• If planning on a state school education, stick with the schools in your state. Out-of-state tuition can increase the cost of college by as much as a third.
• Unless a student can get a significant scholarship, choose a state school instead of a private university. Tuition inflation at private schools exceeds that of state universities.
• If a private school education is desired, consider doing the first two years at a state school and then transferring to the private school.