College Savings Are Shrinking, So Families Are Borrowing More to Cover Six-Figure Tuition Bills

College now costs six figures a year at a growing list of schools, and the math isn't working for most American families anymore.

Just 12% of Americans surveyed say a four-year degree is affordable, according to a Lumina Foundation and Gallup poll of roughly 14,000 adults without a degree or working toward one, nearly 6,000 graduates, and 2,000 employers, conducted June 1-15. Cost is the number one reason people don't enroll, an earlier release from the same study found.

"Americans haven't given up on higher education; they want it for their children ... but they are questioning whether they can afford it," said Courtney Brown, chief data and research officer for the Lumina Foundation.

Savings Are Falling, Fast

Parents who saved for college reported setting aside an average of $37,897 in 2026, down sharply from $51,310 in 2025, according to College Ave, a private student loan company that surveyed 1,000 parents of current four-year college students in June.

The confidence numbers dropped right along with it. Only 16% of families who saved for college say they feel prepared to cover a full degree through savings alone, down from 27% just a year earlier, College Ave found.

So where's the rest of the money coming from? A patchwork: savings, student jobs, federal and private loans, and credit cards, according to College Ave's research.

Nearly Half of Families Are Borrowing

Almost half of families borrowed money to pay for college in the 2025-26 academic year, and 68% of those said borrowing was part of the plan from the start, according to Sallie Mae's How America Pays for College report, which surveyed 1,000 parents of undergrads aged 18-24 and 1,000 undergraduate students in April and May.

Parent income and savings typically cover less than half the bill. Scholarships and grants make up more than a quarter. Student loans fill most of what's left, Sallie Mae found.

That's a lot of families betting on debt to get a degree, and the borrowing rate has held steady even as costs climb, according to Sallie Mae spokesman Rick Castellano.

"If you are going to borrow for school, the last thing you want to do is overborrow, and ultimately, you want to have a plan for how you'll pay it back," Castellano said.

A degree that leaves a graduate buried in debt with no repayment plan is a financial trap, regardless of who's in the White House.

New Federal Borrowing Caps Take Effect

Starting this year, the legislation in President Donald Trump's "big beautiful bill" caps how much students can borrow through federal loan programs.

Critics could reasonably argue that capping federal loans, without capping tuition growth, just pushes families toward pricier private loans and credit cards, potentially the worst options on the table given typically higher interest rates and fewer consumer protections than federal loans.

That's a fair concern. Private loans generally don't come with income-driven repayment options or the forgiveness programs tied to federal loans, and credit card debt carries some of the highest interest rates in consumer finance.

But the polling suggests most families don't see it that way. Two-thirds, 66%, of families surveyed actually support limits on federal student borrowing, according to the same reporting.

This suggests a lot of the same families drowning in tuition costs also think unlimited federal borrowing is part of what got colleges to $100,000 a year in the first place. When schools know the federal government will backstop nearly any loan amount, there's less pressure to hold the line on price. Capping the spigot is one lever to test that theory, though nobody has proven the caps alone will bring tuition down.

What's Unresolved

None of this settles whether the new borrowing caps will actually lower what colleges charge, or whether they'll just shift more of the burden onto private lenders and family credit cards, exactly the outcome the caps' critics warn about.

The first full academic year under the new limits is still playing out, and there's no data yet on how many families hit the new caps or how they covered the gap. That's the number worth watching next: whether private loan originations and credit card balances for tuition climb as the federal caps bite, according to the same lenders now tracking this data.