How Families Afford College

Families Use Savings, Scholarships, and Loans to Tackle Rising College Costs

For many families, paying for college is a balancing act between savings, financial aid, and borrowing. A recent Sallie Mae survey shows the average undergraduate student’s costs reached $30,837 for the 2024–25 school year—up 9% from the year before.

How Families Are Paying
More than half of the total was paid out-of-pocket through income and savings, averaging $15,754 per family. Many families also tapped scholarships, grants, and borrowed funds to bridge the gap:

• Scholarships: 60% of families received awards averaging $8,004, often making it possible for students to attend college.
• Grants: 57% received grants averaging $6,180, most from federal programs.
• Borrowing: Parents increasingly turned to federal Parent PLUS loans, other loans, or even credit cards.

Challenges and Trade-Offs
With the rising cost of living, some families cut expenses or even dipped into retirement savings to cover tuition bills. Despite these sacrifices, 73% of families said they would rather borrow money than see their student skip college.

While the price tag keeps growing, most still view higher education as a valuable investment in their student’s future.