College Funding Calculator

There are two ways to pay a college bill, and they cost very different amounts. Save ahead in a 529 — a tax-advantaged college-savings account where money grows and comes out tax-free for education — and tax-free compounding quietly pays for a chunk of the tab, so you put in less than the sticker price. Borrow the same bill as a student loan and you pay the full sticker price plus years of interest, so you pay more. The simulator races the two as cumulative-cost lines over time: the saver pays a little, steadily, in the years before college, while the borrower pays nothing until the bill is due and then a lot, for a decade after. At the defaults — a $120,000 bill, $400 a month for 14 years — the 529 grows to about $105,000 (you contributed $67,200; tax-free growth added the other $38,000), covering all but ~$15,000 of the bill, which you borrow. Saving ahead costs about $88,000 all in; borrowing the whole thing costs about $164,000 — the sticker price plus $44,000 of interest. That's roughly $76,000 less for the family who planned ahead, and it splits almost evenly into two forces: tax-free growth working for you, and loan interest you never pay. The deeper lesson is the same one behind compound interest and opportunity cost: time is the lever. A dollar saved years early is multiplied by tax-free growth; a dollar borrowed is multiplied by interest. Start early and small beats start late and large. The honest caveats: this ignores financial aid, scholarships, and grants (which can shrink the bill for either family), 529 rules on leftover money, and the fact that not all of college has to be paid by you — but the core trade-off, save-ahead-cheap vs borrow-later-expensive, holds.

Free and interactive — no sign-up, nothing to install. Read the full lesson for the plain-language explanation.