The Education Calculator is a tool that illustrates the true cost of college to your clients and creates the basis of a savings model. The numbers may seem straightforward, but the calculator allows you to factor in the yearly rate of increase in tuition and interest on student loans.
It is simple to toggle between student information or parent information, which illustrates the base cost and the amount needed to be saved by the parents.
The calculator can accommodate the information of up to ten children, making the total cost of education accessible from the beginning, rather than creating extra legwork for each child. Loan and grant information may also be entered, which is helpful in demonstrating the impact of scholarships and grants on a tuition cost—and the financial consequences that can accompany a loan.
A helpful illustration to parents and children alike is to plug in the tuition information without including the rate of increase, to show the effects of inflation and how tuition can carry some “hidden” costs. The calculator demonstrates these numbers in easy-to-comprehend charts that compare the values against each other.
The calculator automatically translates the sum into the client’s assets as of the present day, which can be a helpful tool in demonstrating savings.
When you plug in the value of today’s dollar into the present value field, you can see the lifelong impact and costs of education. For some, the information is better understood in detail rather than with a chart. The calculator makes it simple to toggle between the two.
When working with your client, you may also consider using in tandem with the payment calculator, in order to break down the monthly cost of a loan or show the opportunity cost of college by plugging their numbers into the future value calculator. The information displayed through the education calculator can be a large sum to wrap one’s head around, so take care with your client while showing them the true cost of an education.
Values that should be taken away from this demonstration are the value of honoring education, the importance of a student putting significant thought into their future, and the imperative of saving.