American families spent an average of $34,019 on college during the 2025-26 academic year, according to “How America Pays for College 2026,” a new report from financial services company Sallie Mae based on a survey conducted by Ipsos. That figure represents a 10% increase from the previous year’s average of $30,837 — a notably sharp jump for a single academic year. The survey drew responses from 1,000 undergraduate students and 1,000 parents, gathered this past spring.
The number covers more than just sticker-price tuition. According to Sallie Mae, the $34,019 figure includes every dollar families put toward higher education over the year — tuition and fees, but also books, technology, housing, meals, and travel. A company spokesperson noted that the increase “is not necessarily a function of higher tuition alone,” pointing instead to the full range of costs bundled into a student’s total college expenses.
Where the Money Actually Goes
Separate data from the College Board helps put the tuition portion of that number in context. Average published tuition and fees rose 4% to $45,000 at private, nonprofit four-year colleges in 2025-26, while in-state students at public four-year schools saw a smaller 2.9% increase, bringing average tuition and fees to $11,950. Fifteen colleges will now charge more than $100,000 in combined tuition, fees, and living costs for the fall 2026 term, according to The Princeton Review — a threshold that publication’s editor in chief, Rob Franek, described as a clear signal of how sharply prices have escalated.
It’s worth noting that these headline figures can overstate what most families actually pay. The College Board points out that, after adjusting for inflation, average net tuition and fees at public four-year colleges have actually declined over the past decade once grant aid is factored in. Most students don’t pay the full advertised sticker price, since scholarships and grants reduce the real cost substantially for a large share of families.
New Federal Loan Caps Are Reshaping How Families Pay
According to the Sallie Mae survey, families covered their 2025-26 college costs through a mix of sources: 49% came directly out of pocket from income and savings, 27% from scholarships and grants, 22% through borrowing, and a small remaining share from gifts. Nearly half of surveyed families, 47%, borrowed money to help pay for college during the year.
That borrowing landscape is shifting. New federal student lending caps took effect in July 2026, replacing the previous Parent PLUS loan structure — which had allowed families to borrow up to a student’s full cost of attendance — with a hard cap of $20,000 per student per year and $65,000 total over the course of a degree. The federal Grad PLUS loan program is being phased out entirely, with new, lower borrowing limits set for graduate students as well.
Families surveyed were broadly supportive of the change in principle: two-thirds said they support federal lending limits. But there’s a clear expectation attached to that support — 53% said colleges should respond to the tighter borrowing limits by lowering tuition, while 38% said schools should offer more scholarships and 36% said they should provide larger financial aid packages.
Families Still See College as Worth It
Despite the rising costs, the report’s broader finding is that most families haven’t lost confidence in the value of a college degree. Price is clearly a major factor in the decision-making process — 79% of surveyed families said they ruled out at least one college at some point specifically because of its cost — but the overall sentiment in the survey leaned toward college still being viewed as a reasonable investment when weighed against the alternative.
A Practical Takeaway for Families Planning Ahead
For families with a student heading toward college in the next year or two, the most useful step is treating cost comparisons the same way 79% of surveyed families already do: actively ruling schools in or out based on realistic total cost, not just the advertised tuition figure. With Parent PLUS borrowing now capped at $20,000 per year, families who previously planned to borrow the full gap between financial aid and total cost of attendance will need to build a different plan — whether that means leaning more heavily on scholarships, choosing a lower-cost school, or covering more of the gap through current income and savings. Given how much borrowing rules have shifted this year alone, it’s worth reviewing a school’s financial aid offer letter carefully rather than assuming last year’s loan options are still available in the same form.
