College costs have become a significant financial burden for American families, with only a small percentage viewing four-year institutions as affordable. A recent survey by the Lumina Foundation and Gallup found that just 12% of surveyed adults without degrees or pursuing them consider colleges financially reachable, with cost identified as the primary obstacle to enrollment.
Families are employing multiple strategies to finance education. Nearly half of families borrowed money during the 2025-26 academic year, with the majority indicating borrowing was always part of their plan, according to Sallie Mae’s latest report. Parent income and savings typically cover less than half of college expenses, while scholarships and grants account for over a quarter of costs and student loans cover the remainder. A separate College Ave survey revealed that parental savings for college declined significantly to $37,897 in 2026 from $51,310 in 2025, leaving only 16% of families feeling prepared to cover total degree costs through savings alone.
Historical shifts in education funding have driven tuition increases. Reductions in state funding over recent decades have substantially raised college costs. Following the Great Recession, tuition at private four-year schools rose 26% between 2008 and 2018, while public institutions experienced a 35% increase. Today, tuition provides approximately half of college revenue compared to just one-quarter historically, with state and local governments contributing the remainder rather than the majority they once provided.
Current trends show no sign of slowing. According to J.P. Morgan Asset Management data, tuition increases at approximately 5.5% annually, outpacing both inflation and wage growth. New federal borrowing limits implemented this year may reshape how families approach college selection and financing strategies moving forward.
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