Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTDrew WoodFri, June 26, 2026 at 5:28 PM GMT+2 7 min readQuick ReadA $300,000 portfolio yielding 5% generates $15,000 annually to cover in-state public university tuition while leaving the principal completely intact.A 3.5% yield with 7% annual dividend growth doubles income within a decade, while a static 10% yield fund stays flat and loses purchasing power.Unlike a $60,000 lump-sum gift that depletes after graduation, a $300,000 dividend portfolio keeps paying and can fund multiple grandchildren sequentially.Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.College has become so expensive that many students and parents struggle to cover the cost on their own. Grandparents are often in a different position, having accumulated assets over decades that younger generations have not had time to build. That makes tuition one of the most meaningful gifts they can provide. Rather than leaving an inheritance someday, they can help open doors today by creating a portfolio that generates enough income to cover tuition while leaving the principal intact.Ljupco Smokovski / Shutterstock.comMost families tackle the problem with a 529 plan, contributing for years and hoping investment growth keeps pace with rising costs. Another approach is to build a portfolio that pays the tuition bill itself, turning a pool of assets into a family scholarship fund that can potentially support multiple generations.What College Actually CostsThe target depends on the school. Community colleges often charge $3,000 to $6,000 per year in tuition and fees. In-state public universities typically fall between $10,000 and $15,000 annually, while out-of-state public schools can run $30,000 to $45,000. Private colleges frequently exceed $50,000 per year before room and board.For this article, we'll use a $15,000 annual target, or about $1,250 per month, which is enough to cover tuition at many public universities and flagship state schools. The question is simple: how much capital does it take to generate that income indefinitely?Are you ahead, or behind on retirement?