By Hayden Burrus, Type Z Finance Special to the Pineapple Q: My baby was just born and I am already scared I won’t be able to afford college. Am I too late or will I be able to save enough? A: Take a deep breath and relax. You’ve got 21-22 years until you make your last college payment. The guy who should be scared is the one who buried his head in the sand and his child is now 18. The bad news is that college is expensive: $100,000 for a public university and possibly $200,000 or more for a private university. The good news is that you’ve got time … and help! Before we get into the complex financial planning aspect of things, let’s just start with some simple math: 22 years is 264 months. If you save in a dedicated college fund, your savings should be able to at least keep up with the rate of tuition increases. It isn’t unreasonable to think that you might do 1% or better than college inflation. Bam! Your monthly college payment for a public university is down to $339 (plus the investment gain in your account). This is doable for many middle-class families. And that’s the worst case scenario. Let’s try to knock it down even further. If you’re in the middle-class zone (which I define as a family income of $40,000-$100,000, with less than $50,000 in total savings), you will be able to establish financial need. I quickly ran the numbers for a few hypothetical middle-class families on the Smart Student Guide to Financial Aid website. I found that middle-class families with only one child in college can establish between 10 percent and 80 percent financial need at a public university and between 50 percent and 90 percent financial need at a private university. Many colleges, including elite colleges, will provide a scholarship equal to the entire financial need of the students they admit. If Suzie Student chooses one of these colleges, she’s getting a quality college education on sale, and your savings need has dropped dramatically. If you have established a 50 percent financial need, you are buying an education at 50 percent off. That’s awesome! The college costs are going to drop to about $50,000+ (private universities will give more aid). But that’s not all, there’s more. Your baby is cute and helpless now, but by the time Suzie Student is 18, you may feel a little differently. You will likely feel that Suzie Student should contribute as much as possible to her own college education, even if she’s never earned a dime in her life. Send her to the student loan office. Full-time college students can get $27,000 in loans over the four years they are enrolled full time in college. These loans charge a great low interest rate (currently at 2.66 percent) and they don’t have to start being paid back until six months after graduation. Guess what? Suzie can contribute $27,000 of the $50,000 you owe! You only have to come up with $23,000, and you’ve got 22 years to scrape that together. Using the simple math we discussed earlier, your monthly savings can drop to as little as $87. You can do that. Don’t tell me you can’t. Key takeaways: • College is expensive. • You’ve got time. • Aid and loans are available. • Your child can get a student loan, too. • A middle-class family may be able to get their college costs down to $87 per month if they start now. • You can do it! For more about financial planning for college and college savings options, visit www.typezfinance.com.