A complete college funding plan · Updated July 1, 2026 for the new federal loan rules
Make a College Plan
Paying for college is complicated, and the uncertainty is stressful. The surest way to ease it is to get ahead of the plan — to see the whole picture early, while there's still time to shape it. This tool shows how saving and borrowing work together: how much to set aside, what federal loans can cover, and where the two meet. Everything updates as you go, so the plan comes into focus as you decide. A plan like this can span many years, and plenty will change along the way — costs, income, and aid. Revisit it now and then to check where you stand and make adjustments.
Updated for the federal student-loan rules effective July 1, 2026 — the new Parent PLUS borrowing caps ($20,000 a year, $65,000 per student) and the 2026–27 interest rates (6.52% undergraduate, 9.07% Parent PLUS). Sources: Federal Student Aid — loan program updates and U.S. Dept. of Education — 2026–27 Direct Loan rates.
Break it down — tuition, housing, aid…
Defaults are 2025–26 national averages (College Board, Trends in College Pricing 2025). The net applies to all four years; editing a line switches the school type to "Custom."
Inflation
Growth & risk assumptions
Simplified teaching assumptions, not predictions. Returns vary and are never guaranteed. Not investment or tax advice.
Loan assumptions
These figures reflect your current plan. To change them, edit your savings in the Plan tab.
| Age | Phase | Contributed | Gains | Withdrawn | Ending balance |
|---|
- A 529 is a tax-advantaged college savings account. Money invested for education can grow without the usual taxes when used for qualified costs.
- Save before the expense arrives. The goal is money ready by the time tuition is due.
- College costs tend to rise. A year that costs less today will likely cost more by enrollment.
- Investment growth does part of the work. The more the account earns, the less you contribute yourself.
- Many families lower risk as college nears. There's less time to recover from a dip once the bills are close.
How the future cost of college is calculated
Today's cost is grown by the education-inflation rate for every year until the bill is due — today's cost times (1 + inflation) raised to the number of years away. At 3%, a cost 15 years out is multiplied by roughly 1.56.
Why starting earlier lowers the monthly amount
The earlier you begin, the more months you spread saving across and the longer each dollar grows. Both pull the monthly amount down. Time is the most powerful lever here.
Why investment growth helps — but is uncertain
Investment gains are growth on top of what you put in. They do real work, but growth isn't promised — the returns here are simplified assumptions, not guarantees.
Why risk matters most near the spending date
A decade out, a market dip has time to recover. A year out, it doesn't. The glide path gradually shifts toward safer assumptions as freshman year nears — the automatic default in most 529 plans.
Saving during college
The junior- and senior-year bills are still years away when college begins, so money saved during the early college years still helps. Continuing to contribute usually lowers the monthly amount or shrinks what you borrow.
Key takeaway
Saving is a race between rising costs and investment growth. Starting early gives growth more time to win, lowers the monthly amount, and leaves room to carry more risk while the goal is far off. This is an educational model, not investment or tax advice.
These figures reflect the gap your savings leaves. To change them, edit your loan assumptions in the Plan tab.
| Cap | Used | Limit | Remaining |
|---|
| Loan | Borrowed | Fee | Net proceeds | In-school interest | Rate | Monthly | Total interest | Total repayment |
|---|
| From start | Phase | Subsidized | Unsubsidized | Parent PLUS | Total balance | Interest to date | Principal to date |
|---|
| Year | Subsidized | Unsubsidized | Parent PLUS | Total |
|---|
- Borrowing adds up year after year. Four years of gaps become one large balance by graduation.
- Limits come in two kinds. Annual caps limit each year; lifetime (aggregate) caps limit the total across all four years.
- Subsidized is cheapest. The government pays its interest while the student is in school and during the grace period.
- Deferred interest still grows. Unsubsidized and Parent PLUS interest builds during school and is added to the balance at repayment.
- Parent PLUS is the parent's debt. Higher rate, higher fee, and capped at $65,000 total per student.
Annual limits vs. lifetime limits
An annual limit caps how much you can borrow in one academic year; an aggregate (lifetime) limit caps the total across all years. A dependent undergraduate can borrow up to $31,000 in Direct Loans, up to $23,000 of it subsidized; Parent PLUS is capped at $65,000 per student. Cross a ceiling and the extra becomes an unfunded gap.
The hidden cost of in-school interest
For a subsidized loan, the government pays interest during school, so the balance doesn't grow. For unsubsidized and deferred Parent PLUS, interest accrues from disbursement and is capitalized — added to principal — at repayment, so you pay interest on interest.
When Parent PLUS repayment starts
Parent PLUS normally repays as soon as it's disbursed — usually the cheaper choice, since interest never piles up. Deferring it delays the bills but grows the balance.
Why year-one borrowing is the most expensive
A dollar borrowed freshman year accrues interest for about four and a half years before repayment; the same dollar borrowed senior year accrues for only about six months. Front-loaded borrowing costs more.
Lower payments do not mean lower cost
Stretching repayment over more years lowers the monthly bill but adds months of interest, so the lifetime cost usually rises.
Key takeaway
Borrow the cheapest, most protected money first, watch the lifetime caps, and treat Parent PLUS with care. This is an educational model, not financial advice.