For families sending a child to college this fall, the cost of attendance has risen by thousands of dollars compared with just a year ago.
Families spent an average of $34,019 on higher education during the 2025-26 academic year, Sallie Mae’s latest annual study found.
That figure jumped 10% from $30,837 the prior year, though Sallie Mae cautioned that the total reflects a mix of tuition, housing, books, and other costs rather than tuition alone.
The spending increase alone is striking, but it lands alongside a steep decline in reported college savings and new federal borrowing limits.
The combination could leave families with a wider cost-of-attendance gap than they anticipated, with fall semester bills now arriving within weeks.
College spending climbed 10% in the latest Sallie Mae and Ipsos data
The report, conducted by Ipsos on behalf of Sallie Mae, surveyed 1,000 undergraduates and 1,000 parents between April 22 and May 26, 2026. Family income and savings covered the largest share of costs at 49%, followed by scholarships and grants at 27% and borrowing at 22%.
Slightly more than half of families, at 52%, paid less than the school’s advertised price, meaning institutional aid continued to reduce actual bills.
Meanwhile, 47% of families reported borrowing to pay for college, and 68% of those borrowers said loans were always part of their plan.
Nearly four in 10 (38% of) borrowing families said access to loans allowed them to consider a higher-cost school than they otherwise would have, the report found.
Families still view college as worth the cost and remain confident in their financial choices, noted Dan O’Leary, senior research manager at Ipsos, in a press release.
That confidence remained even when families had to stretch their household budgets to cover the full bill, O’Leary added.
Reported college savings collapsed 26% in a single year
A survey from College Ave, conducted by Barnes & Noble College Insights, measured an even sharper pressure point behind the spending increase.
Parents who saved for college reported setting aside an average of $37,897, a 26% drop from the $51,310 reported the year before.
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Only 16% of families who saved said they felt prepared to cover the total cost of a degree through savings alone, College Ave found. That share fell from 27% just one year earlier, a decline that signals growing unease among families who believed they had saved enough.
One visible response is a sharp rise in the share of parents reporting their child will live at home during college, which climbed to 26% from 10% the prior year.
Dan Kennedy, chief marketing officer at College Ave, described families as taking a collaborative approach that pools savings, scholarships, student earnings, and borrowing.
That shift away from relying on a single funding source reflects how sharply the gap between savings and costs has widened, the College Ave survey found.
New Parent PLUS caps create funding gap only 22% of families fully understand
The savings decline arrives at a time when a major federal borrowing backstop narrowed significantly for families entering college this fall.
As of July 1, Parent PLUS loans for new borrowers are capped at $20,000 per dependent student per year, with a $65,000 aggregate limit per dependent student.
The caps, established under President Trump’s Working Families Tax Cuts Act, also known as the One Big Beautiful Bill Act, replace a program that previously let parents borrow up to a school’s full cost of attendance.
Only 47% of families were aware the cap existed when surveyed, and just 22% were fully aware of the details, according to The College Investor’s analysis of the Sallie Mae data.
The Graduate PLUS loan program has also been eliminated for new borrowers as of the same date under the same federal legislation.
Betsy Mayotte, president of the Institute of Student Loan Advisors, warned that parent borrowers face steeper consequences under the new legislation than most other groups of federal student loan holders.
Unfortunately Parent PLUS borrowers got hit harder than most, and I don’t think that has clicked quite yet…
New Parent PLUS loans no longer qualify for income-driven repayment plans, which means monthly payments will follow a fixed schedule over 10 to 25 years, according to the National Association of Student Financial Aid Administrators.
Parents who held a PLUS loan disbursed before July 1, 2026, can continue borrowing under the prior rules for up to three additional academic years or until the student completes the program, whichever comes first, according to Northwestern University’s Chicago Financial Aid office.
The funding gap families with college-bound students are still weighing
The challenge surfacing across these reports is less about whether families value a degree and more about what the actual funding gap looks like.
Families that planned around uncapped Parent PLUS borrowing may not have recalculated since the $20,000 annual cap took effect six weeks ago.
Rick Castellano, vice president of corporate communications at Sallie Mae, said in an Aug. 12, 2026, announcement that early conversations about the full cost of a degree help families compare options.
Those discussions also reduce the risk of missing out on scholarships and institutional aid that can close the gap, Castellano noted.
Millions of households are now left to work out whether the financial path they mapped before these changes still adds up under the new borrowing limits.
If it does not, the choice between an institutional aid appeal, an in-state alternative, or private borrowing is one families will confront before the semester begins.
