How much should I save for college?

Four inputs decide almost all of the answer, and the first one matters more than the other three combined.

• The type of school. The College Board's Trends in College Pricing and Student Aid 2025 puts the average 2025-26 full-time budget (tuition and fees, housing and food, books, transportation and other costs) at $21,320 for a public two-year college, $30,990 for an in-state public four-year, $50,920 for an out-of-state public four-year and $65,470 for a private nonprofit four-year.
• Sticker price or net price. The same report estimates that first-time full-time students at in-state public four-year colleges paid an average net cost of attendance of $21,340 after grant aid. At private nonprofit four-years, average grant aid and tax benefits cut a $45,000 published tuition to $16,910 in net tuition; taking that same $28,090 off the $65,470 budget leaves a net cost of about $37,380. Grants are need-based and merit-based, so your family may land well above or below the average.
• The share savings should cover. A widely used planning rule of thumb splits the bill into thirds: one third saved in advance, one third paid from income during the college years, and one third borrowed. Families who want to avoid borrowing plan on saving the full amount.
• Time. The years until enrollment set how much work compounding does. Money put away at birth has 18 years to grow, while money put away at 14 has four.

The college tuition statistics page has the full price series by sector, including how published tuition has moved against inflation.

Take a newborn and an in-state public university at full published cost, the most common benchmark. The assumptions are stated so you can swap your own in.

1. Today's cost. $30,990 a year, the College Board's 2025-26 in-state public four-year budget.
2. Cost growth. 3% a year. The College Board reports that 2025-26 tuition at public colleges rose just above general inflation of 2.6%, so 3% is a middle-of-the-road planning rate rather than a forecast.
3. Cost at enrollment. Eighteen years at 3% multiplies prices by 1.03 to the 18th power, about 1.70. The first year costs about $52,750. Years two to four keep rising at 3%, so the four years together come to about $220,700.
4. Return on savings. 6% a year, compounded monthly at 0.5% a month. That is a moderate assumption for a mix that starts mostly in stocks and shifts toward bonds and cash as enrollment approaches, which is how most age-based 529 portfolios behave.
5. The monthly figure. A deposit made every month for 216 months at 0.5% grows by a factor of ((1.005^216) - 1) / 0.005, about 387.4. Dividing $220,700 by 387.4 gives about $570 a month.

Covering one third of that bill, under the thirds rule, takes $220,700 / 3 / 387.4, or about $190 a month. Planning on the average net price after grants instead ($21,340 a year today, about $152,000 for four years at enrollment) takes about $390 a month to cover in full.

A lump sum does the same job. At 6% a year compounded monthly, money grows by 1.005^216, about 2.94 times, over 18 years. So about $75,000 invested at birth reaches the same $220,700 with no further deposits. Grandparents sometimes fund an account this way, which is why the five-year gift election described in how much you can contribute to a 529 exists.

The example simplifies in two directions. It ignores growth on money that is still invested during the four college years, which lowers the true figure slightly. It also holds the 6% return steady, while real markets deliver it unevenly, which is the reason for building in some slack.

The same math repeated for later starting ages and other targets. Every figure assumes a 6% annual return, 3% annual cost growth from 2025-26 College Board averages, monthly deposits until age 18, and four years of school.

Two patterns stand out. Starting at birth instead of 10 cuts the monthly amount by more than half for the same goal, because the earlier dollars have more than twice as long to grow. And the gap between public and private is smaller after grants than before them: private nonprofit colleges discount their published prices far more heavily, so a $45,000 sticker tuition averaged $16,910 after grants and tax benefits in 2025-26.

Full published cost at a private nonprofit, $65,470 a year today, would take about $1,200 a month from birth. Few families plan on that figure, because few families pay it.

A 529 plan is the account built for this. Contributions go in after federal tax, growth is untaxed, and withdrawals are tax-free when used for qualified higher education expenses, per IRS Topic 313. Many states also give a deduction or credit for contributions to their own plan. The mechanics are in how a 529 plan works, and what counts as a qualified cost is in 529 qualified expenses.

Several rules shape how much it makes sense to put in:

• Federal law sets no annual contribution limit, but a contribution is a gift to the beneficiary. The gift tax annual exclusion is $19,000 per recipient for 2026 (IRS Rev. Proc. 2025-32), and a five-year election lets one person front-load five years of that at once.
• K-12 tuition is now covered up to $20,000 a year across all of a beneficiary's 529 accounts, up from $10,000 before 2026, per the IRS. Using the account for private school earlier draws down the college pot.
• Leftover money has an exit. Up to $35,000 over a lifetime can roll into the beneficiary's Roth IRA, subject to the annual Roth limit, if the account has been open at least 15 years. The details are in 529 to Roth IRA rollover rules.
• Non-qualified withdrawals cost something. The earnings portion is taxable income and, under IRS Publication 970, generally carries a 10% additional tax, with exceptions such as a tax-free scholarship.

Some families split savings between a 529 and a Roth IRA or a taxable brokerage account, trading some tax benefit for flexibility. That tradeoff is laid out in 529 vs Roth IRA for education savings. For what tends to sit inside these accounts, see ETFs commonly used for college savings, and for how large the 529 market has grown, the 529 plan statistics page.

Walnut is an AI investing app that reads the brokerage accounts you connect. It does not move money from your bank and does not run a 529 plan. Most 529 plans are run by states through program managers rather than held at a brokerage, so whether yours can be linked depends on where it sits. A brokerage account set aside for college can be connected directly.

1. Connect the account you save in

Link your brokerage read-only. Walnut reads your holdings and shows how the portfolio has done against the S&P 500 over the same window.

2. Set an education goal

Enter a target amount, the years until enrollment and your monthly contribution. Walnut projects the portfolio forward at a stated 7% assumed return and shows whether the projection reaches the target, and by how much it falls short or clears it. Use the table above to choose the target.

3. Give the money a plan

A basket holds a set of funds or stocks at target weights, for example a stock fund and a bond fund weighted to match the years left. Walnut shows when holdings have moved away from those weights and what trades would bring them back. Any trade happens at your broker, only after you approve it.

4. Automate the monthly amount

A recurring investment spends a fixed amount into a basket on a schedule, using cash that is already in the connected brokerage account. Your own bank transfer to the broker is what puts the money there, so the two schedules have to line up.

5. Ask the assistant

The assistant can rerun the arithmetic in this guide with your numbers: a different school, a later start, or a lump sum from a grandparent. It reads your real holdings when it answers.

• Planning on tuition alone. Published tuition at an in-state public four-year was $11,950 in 2025-26, but the full budget was $30,990. Housing and food alone was $13,900. A plan built on tuition covers well under half of the bill.
• Assuming the sticker price applies. Many students receive grant aid. Running the net price calculator on a few target schools gives a far better target than the published price.
• Waiting for a lump sum. The table shows the cost of delay: $190 a month at birth becomes $445 at age 10 for the same one-third goal.
• Holding too much in stocks late. A large market decline in the final two or three years leaves little time to recover. Age-based portfolios shift toward bonds and cash for that reason.
• Starving retirement to fund college. Loans exist for college and not for retirement, which is why many planners put retirement savings first. See how much you need to retire for the other side of that budget.
• Forgetting the rest of the child's costs. College comes on top of 18 years of other spending, covered in the cost of raising a child statistics.

College prices, budgets and net prices are from the College Board's Trends in College Pricing and Student Aid 2025 (Figures CP-1, CP-9 and CP-10) and its highlights page. The 529 rules on K-12 tuition, student loan repayment and Roth IRA rollovers are from IRS Topic 313, and the additional tax on non-qualified distributions from IRS Publication 970. The 2026 gift tax annual exclusion is from Rev. Proc. 2025-32. Savings projections are Walnut's arithmetic under the stated assumptions, not forecasts. Walnut is informational and is not an investment adviser. This guide is educational and not personalized financial advice.