College costs rise as families rely on mixed financing strategies

College expenses in the United States are rising, with families spending an average of $34,019 for the 2025-26 academic year, a roughly 10% increase from the previous year. According to data from Sallie Mae and other studies, families utilize a combination of funding sources to manage these costs. Family income and savings account for 49% of total expenses, while scholarships and grants cover 27%. Borrowing through parent and student loans accounts for 22%, and gifts from relatives or friends contribute approximately 2%.

Affordability remains a significant concern. A survey by the Lumina Foundation and Gallup found that only 12% of surveyed Americans believe four-year colleges are affordable. Additionally, data from College Ave indicates that average parental savings designated for education dropped from $51,310 to $37,897 between 2025 and 2026, leaving only 16% of saving families feeling adequately prepared to cover costs through savings alone.

The rising costs are attributed to structural shifts in higher education funding. As state investment has decreased, the financial burden has shifted toward students and families. Tuition now generates approximately half of college revenue, up from roughly a quarter historically, with annual tuition increases averaging 5.5%, a rate that exceeds general inflation.