Welcome
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Cost HERO is a free calculator that guides you through the
design of a four-year college budget using your rules.  
It is best used as a high level view of what is affordable for you.
Once you have a budget that works, you are ready to begin the
college search.
We encourage you to share this tool with others who might benefit.
Note:  This tool does not save your data for re-sale or distribution of any kind.
  College Cost HERO      
Step 1:  In this step you will gather information about your non-retirement savings and investments.  You will also gather
information about your student's savings and investments.  The goal is to get a round figure of the funds available to use for
college.  You do that by entering the appropriate amount in Lines 1-4.  Then you decide how much - the percent of each - to 
use for college.  The total is automatically calculated for you, and will be visible in Step 3.
Enter data in blue cells
Enter account balance and percent (0-100%) you want to use for this student Balance % to use
1 Coverdell & 529 Savings (Enter total for all students)
2 Other Savings/ Investments
3 Student Savings/Investments
4 Anticipated gifts from relatives or others
5 Total (based on the percent you want to use for college)
  College Cost HERO        
Step 2:  In this step you will gather information about your hourehold income and debt payments.  You'll need to know how much
income you generate each month and what it costs for housing and debt service.  Enter your data in Lines 8-17.  Note that some
of your current household costs will be reduced or eliminated when your student begins college.  For example, you will no longer
pay tuition for a private school.  You might stop contributing to 529 Savings. Most parents report lower overall costs for food, 
utilities, fuel, auto insurance and more.  Think about all the money you spend on a teen living at home!  Much of that will be 
available to use for college. College students usually work part time during school and full time during vacations and summers.
How much will you expect your teen to contribute toward college? And finally, ask yourself how much monthly income you could  
find for college with a 10% cut in non-essential expenses.  Enter that amount on line 17.
Enter data in blue cells
7 For the following, enter monthly amounts
8 Total Monthly Income From All Sources (Parents)
9 Housing costs (principal, interest, taxes, insurance) or Rent
10 Auto Loan or Lease Payments (all)
11 Monthly payments for ALL consumer or educational loans
12 Current contributions to 529 or other College Savings Plan
Funds from income to be used for college are calculated below
13 If willing to suspend all or part of Line 12 above, enter amount per month
14 * Monthly cost reduction for food, gas, utilities, etc. (see note below).
15 Amount you expect student to earn monthly (suggest $200 minimum)
16 Private high school tuition & other costs no longer incurred each month
17 Additional monthly income  for college with a 5%-10% budget cut
18 Total
* Remember - college students  don't create the day-to-day costs
you've been absorbing for the past 18 years!  For example, your electric bill
will be reduced.  Your grocery bill will go down.  You will be putting fuel in your
vehicles much less frequently.  And more.  Do some math and arrive at a figure
that works for you. A reasonable amount would be $300 per month.
  Step 3: Your Plan  
Below is the plan you just created!  To finish, you'll need to do a few more simple things.  The first is to enter Y or N to the
question of student loans.  If you enter Y you wil see the max amount that students can borrow under the Federal student
loan program.  Just above the gray border line, you see the year-by-year totals.  That's what your plan says you can afford
for each year of college.  Once you have that number, you can begin using Net Price Calculators on college websites to
compare your budget with the NPC estimated cost.  Remember, this plan includes NO DEBT for parents.
Should you decide to borrow, enter the amount you need in the appropriate box.  Cost HERO will autocalculate your annual 
loan payments.  Note that it is assumed you will borrow the same amount each year.  Therefore, the payments on the loan
increase each year as you borrow more money.  This does not end well! Note that in most cases, the loan payment in Year 4
is nearly half of the loan proceeds!
    Congratulations! You have designed a college budget!  
19 Sources of Money For College Total Year 1 Year 2 Year 3 Year 4 Total
20 From Parent  Income
21 From Savings
22 From Student Earnings
23 From  Federal Student Loan? (enter Y or N)
24 From  Federal Tax Credit (AOTC)3
25 Total For This Plan by Year- No Parent Debt
26 To add a Parent  loan, enter amount  in blue cell1
27 Less Loan Payments (10 year payment plan)2
28 Total For This Plan by Year- With Parent Debt
29 Note 1:  Based on Federal Parent Loan for Undergraduate Students (PLUS) 2024-25
30 Note2: This is the standard 10-year repayment plan.  Current interest rate is 8.09%.
31 Note 3:  AOTC is a tax credit awarded to families who have a student in college and report Adjusted Gross Income of less than $180,000 (Married Filing Joint)
Cost HERO © 2024.  All rights reserved.
    Buy College Like You Are Buying a Home  
                 
The "Rule of 36/43" is the debt to income (DTI) ratio that lenders use to assess how much you can afford for rent or a home mortgage and other debt. Lenders prefer that your monthly mortgage costs (principal, interest, property taxes and homeowners insurance) or rent should not exceed 36% of your gross monthly income.  They also want your total monthly debt payments (mortgage or rent, auto, credit cards, education loan payments, etc.) to be less than 43% of your gross monthly income.  We apply this rule to borrowing for college in order to prevent you from getting overextended.  The calculation below does the math for you using data you've already entered.  If you entered a parent loan in Step 3, you'll see the payment after four years factored in below. Think ahead to what you might need after college for things like a new roof, a new car, a vacation, home upgrades.  Will your credit be in good enough shape if you need to borrow for these things?  That is up to you.
   
Gross Monthly Income From All Sources
Monthly Mortgage Payment (PITI)
Monthly Auto Payment(s) - All
Other Monthly Payments
College Loan Payment from Step 4 - Your Plan
Current Debt to Income (DTI) Ratio
Additionbal Borrowing Capacity %
Additional Borrowing Capacity $ per month
Additional Borrowing Capacity (Total $)
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YES!  Send me  a copy of my college funding report.
If you want a copy of your plan, complete the information below.
If you prefer not to share your information, but want your data,
use the "Print All" command.  Otherwise, when you exit the tool
your data is permanently deleted.
We do not save or share your data with third parties!
First Name
 Last Name
Email
Student's year of H.S. graduation