How families pay for college as tuition costs soar

With a growing number of colleges and universities costing more than $100,000 a year, higher education is slipping out of reach for many students, several reports now show.

Just 12% of surveyed Americans say four-year colleges are affordable, according to a recent Lumina Foundation and Gallup poll, which surveyed 14,000 adults without a degree or who are working toward one, nearly 6,000 college graduates, and 2,000 employers June 1-15. Cost is the single biggest barrier to entry for prospective students, an earlier Lumina Foundation and Gallup release from the same study said.

“Americans haven’t given up on higher education; they want it for their children … but they are questioning whether they can afford it,” said Courtney Brown, chief data and research officer for the Lumina Foundation, which is aimed at improving higher education access.

Because so many families struggle to cover the tab, they have increasingly depended on federal and private aid to help foot the bill.

Nearly half of families borrowed money to pay for college in the 2025-26 academic year, and 68% of those respondents said borrowing was always part of their plan, according to Sallie Mae’s new How America Pays for College report. The survey polled 1,000 parents of undergraduate students between the ages of 18 and 24, as well as 1,000 undergraduate students, in April and May.

In most cases, parent income and savings cover less than half of college costs. Free money from scholarships and grants accounts for more than a quarter of the costs, and student loans make up most of the rest, the education lender found.

Despite the growing debt burden, families have continued to take out loans at a fairly consistent rate, according to Sallie spokesman Rick Castellano. However, “if you are going to borrow for school, the last thing you want to do is overborrow — and ultimately, you want to have a plan for how you’ll pay it back,” he said.

A separate survey by College Ave found that savings alone play a smaller role in education funding and families are relying on a broader mix of sources to make college possible — including savings, student employment, federal and private student loans, and credit cards. The private student loan company polled 1,000 parents of current college students at four-year institutions in June.

In 2026, parents who saved for college reported having set aside $37,897, a significant decline from the $51,310 they reported in 2025, according to College Ave.

As a result, just 16% of families who saved for college said they felt prepared to cover the total cost of a degree through savings alone, down from 27% a year earlier.

The findings come as families face new limits on federal student loans. Starting this year, the legislation established in President Donald Trump‘s “big beautiful bill” caps the amount students can borrow.

Two-thirds — 66% — of families surveyed support limits on federal student borrowing, Sallie Mae’s report found.

“We’ll see how that plays out over the next year,” Castellano said. “It will be interesting to see if it changes how students and families approach school choice — we know they are looking at costs just as well as academics.”

Except for buying a home, a college education is now the largest expense an individual is likely to have in a lifetime.

It wasn’t always like that. In recent decades, deep cuts in state funding have contributed to sharp tuition increases and transferred more of the cost of college to students and their families, according to analyses by the Center on Budget and Policy Priorities, a nonpartisan research group based in Washington, D.C.

Tuition had historically risen about 3% a year, according to the College Board. But during the Great Recession, declining state investment caused tuition to skyrocket. At private four-year schools, average tuition and fees rose 26% from 2008 to 2018. Tuition plus fees at four-year public schools, which were harder hit, jumped 35% over the same period.

The recession caused by the Covid pandemic led to a new round of cuts to public colleges and universities, the CBPP found.

Today, tuition accounts for about half of college revenue, while state and local governments provide the other half. But the split used to be much different, with tuition providing just about a quarter of revenue and state and local governments picking up the rest.

Because colleges receive less financial support from states and are more reliant on tuition revenue, college tuition costs have increased much faster than any other household expense, according to a 2026 report by J.P. Morgan Asset Management, based on data through the end of 2025.

As schools spend more to hire faculty, make capital improvements and attract students, tuition is rising about 5.5% a year, outpacing inflation and wage gains, J.P. Morgan Asset Management found.

At that rate, “I wouldn’t be surprised if we see more students and families thinking about cost and the ROI of earning a degree,” Castellano said. “You want to get the most value out of what is a significant investment.”

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