American families are spending more on college than they have in recent years, even as concerns about affordability continue to influence where students enroll and how families plan.
According to the 2025 edition of How America Pays for College, a national study conducted by Sallie Mae in partnership with Ipsos, families spent an average of $30,837 on undergraduate education during the 2024–25 academic year, a 9% increase from the year before. The figure marks a return to near pre-pandemic spending levels.
Now in its 18th year, the annual report is based on surveys of 1,000 undergraduate students ages 18 to 24 and 1,000 parents nationwide. The findings provide a detailed look at how families pay for college, the tradeoffs they make and where gaps in financial aid awareness persist.
Despite rising costs, most families surveyed said they continue to view higher education as a worthwhile investment. Many reported a willingness to stretch financially to help students attend schools they believe offer the best long-term opportunities. At the same time, affordability increasingly shapes planning and school choice.
Rather than relying on a single source of funding, families typically use a combination of resources. The report found that income and savings covered the largest share of college costs, at 48%, followed by scholarships and grants at 27% and borrowing at 23%. The remaining expenses were covered by extended family members, friends or other sources.
Scholarships and grants remain a critical factor in reducing out-of-pocket costs, but misconceptions about eligibility continue to limit participation. About 60% of families reported using scholarships, with an average award of $8,004. Among those who received scholarship funding, 75% said it made college possible.
Still, many families never apply.
