College costs for families up 10% from last year, poll finds

Dive Snapshot:

• College costs for families averaged $34,019 during the 2025-26 academic year, up 10% from the previous year, according to an annual report from financial services company Sallie Mae.

• Families paid out of pocket for 49% of those costs — which include tuition, fees, housing and other expenses — drawing from student and parent income and savings, according to a poll for Sallie Mae conducted by Ipsos. They covered another 27% through scholarships and grants and 22% through borrowing. A much smaller amount, 2%, came from gifts from friends and family. 

• How families pay for college could change in the coming years with the implementation of new federal student lending caps. Even so, two-thirds of surveyed families said they support federal lending limits, and 53% said colleges should respond by lowering tuition rates. 

The impact: Price is an important consideration for students choosing a college. A whopping 79% of families eliminated institutions “at multiple stages” in the decisionmaking process due to their price, according to the poll. 

When deciding where to attend, around 4 in 10 respondents said they prioritized price, distance to home, whether colleges were in state and academic programs. Two-thirds of students made the final call on which institution to attend, but 39% of survey respondents said parents and students made decisions about paying for college together. 

Ipsos polled 1,000 undergraduate students from ages 18-24, along with 1,000 parents of traditional-age undergraduate students, via an online survey between late April and late May. 

The background: Nearly half of surveyed families, 47%, borrowed to help cover their college expenses during 2025-26. The borrowing landscape is shifting, however, due to new federal lending caps that took effect in July. 

Previously, families could borrow up to the cost of attendance for undergraduate education through the Parent PLUS loan program. However, the program is now capped at $20,000 per student each year and $65,000 in aggregate. Lawmakers are also phasing out the Grad PLUS program and have set new graduate loan limits.

In response to new loan limits, 38% of families said colleges should offer more scholarships, and 36% said they should provide larger financial aid packages. 

What we’re watching: Many colleges may have limited financial flexibility to lower tuition and offer more aid, as many operate on razor-thin margins. Higher education experts have also warned that state funding for the sector may decline as they absorb more healthcare costs due to federal funding cuts — potentially giving public colleges even less capacity. 

Still, 80% of surveyed college families said they’re willing to “stretch their resources” for a degree, and 75% said they’d rather borrow than forgo college attendance altogether. That may be because families with college students believe higher education will pay off — 82% said they think a degree will result in higher incomes, and 69% said a diploma is key to career success, according to the poll.