A college education isn’t immune to inflation — and prices are on the rise.
The College Board’s most recent Trends in College Pricing report shows that tuition and fee costs at public higher education institutions are increasing at a slightly higher rate than overall inflation in the U.S. While general inflation increased at an annual rate of 2.6%, tuition and fees increased by 2.9% for in-state students and 3.4% for out-of-state students at public, four-year colleges.
Over the last 30 years, the cost of attending a four-year public institution has doubled. In the same time frame, the median family income in the United States increased by just 39%, after adjusting for inflation.
As college prices increase, it’s more important than ever to figure out how you’ll pay for the cost before you enroll. Here’s what to know about college expenses today and your options for covering them.
Average cost of college
College prices vary a lot depending on the specific school you attend, but averages offer a baseline for how much you can expect to pay for college annually.
Here’s a breakdown of the different costs of public and private four-year institutions from the College Board’s 2025-2026 data:
Public, In-state
Public, Out-of-state
Private
Tuition and fees
$11,950
$31,880
$45,000
Room and board
$13,900
$13,900
$15,920
Total
$25,850
$45,780
$60,920
For a four-year degree, you could be paying between $103,400 (for in-state public schools) and $243,680 (for private institutions) over the course of your undergraduate education.
These prices include tuition and fees charged for full-time students, as well as housing and food. But there are other costs you should consider as well. Books and supplies, for example, may include everything from your personal laptop to online textbooks, textbook rentals, and other supplies. These and other expenses, such as transportation, can differ depending on your individual spending.
Using combined overall expenses — average college tuition and fees, room and board, transportation, books and supplies, and other miscellaneous costs — here’s how the College Board estimates annual student budgets, based on full-time, on-campus undergraduate students at four-year institutions:
Public, In-state
Public, Out-of-state
Private
Estimated student budget
$30,990
$50,920
$65,470
Related: How much should I save before going to college?
How to pay for college
Once you know how much your college education will cost, it’s time to figure out how exactly you’ll pay for it. For many students, that looks like a combination of grants and loans. Some students may also have savings or money from family to use toward college expenses.
College Board data from the 2024-2025 school year shows that grants are by far the most popular source of college funding.
Grants make up 68% of the funds undergraduates use to pay for college, while loans (both federal and nonfederal) account for 27% of funding. These are supplemental sources of funding in addition to costs covered by students and their parents.
Here’s a closer look at how grants and loans can help you pay for your education:
Scholarships
Grants for college can come from a variety of sources. According to the College Board data, the majority (49%) of grant aid came from institutional grants.
Institutional grants are financial awards from your college or university that you don’t need to repay. Typically, these grants are either merit-based or need-based. Look closely at institutional grants offered by your school when you apply. Sometimes these funds are granted automatically based on the information you provide when you apply, but they may also require supplemental materials.
You can also find scholarships from sources outside of your college, from private companies (like your or your parents’ employers), local community organizations, and more. Use the Department of Labor’s free scholarship search tool to find scholarships by your home or school location, education level, affiliations you belong to, and other criteria.
Federal grants
The next highest source of grant aid is federal grants, at 39%. If you qualify to receive federal grants, this can be a major help for paying your college expenses.
Often, federal grants are available for students with “exceptional financial need.” These include Federal Pell Grants and Federal Supplemental Educational Opportunity Grants (FSEOG). Both are available to undergraduate students who haven’t previously earned a bachelor’s, graduate, or professional degree.
For the 2026-2027 school year, the maximum Pell Grant amount is $7,395 and the maximum FSEOG amount is $4,000 — though the specific amount you can get depends on multiple factors, including your financial need, cost of attendance, full-time status, and more.
Read more: How to pay for college without taking out student loans
Federal student loans
The U.S. Department of Education offers loans that you can use to pay for college. Federal loans have fixed interest rates that are updated each year, and you’ll need to apply using the Free Application for Federal Student Aid (FAFSA) every year.
Here’s a look at a few of the types of federal student loans:
Direct Subsidized Loans: Available for undergraduate students who demonstrate financial need. Interest doesn’t accrue on subsidized loans while you’re in school or when your loan is in deferment.
Direct Unsubsidized Loans: Both undergraduate and graduate students (along with professional students) can qualify for these loans. You’re responsible for all the interest that accrues on an unsubsidized loan.
Direct PLUS Loans: Graduate and professional students and parents of undergraduate students can borrow PLUS Loans. These loans have higher interest rates and larger borrowing caps than other Direct Loans, but you’re responsible for repaying all the interest that accrues.
You must repay the federal student loans you borrow, generally starting after a six-month grace period when you leave school (though this can vary by loan type). Different federal loan types also have different loan limits.
Federal loans are popular because they typically have lower interest rates than private loans, and most don’t require a credit check. Federal loans also offer added benefits for borrowers — including access to income-driven repayment plans and loan forgiveness programs.
Beginning July 1, 2026, graduate and professional students enrolling in a new course of study, enrolling in a new school, or taking out a Direct Loan for the first time, won’t be eligible for a graduate PLUS loan.
Private student loans
If you don’t qualify for federal student loans or you need more money to pay for college than you can get with federal options, private student loans can be another helpful tool.
These loans are offered by banks, online lenders, and other financial institutions, and don’t have the same loan limits as federal loans. You can usually borrow up to your school’s certified cost of attendance.
Interest rates depend on your income, credit score, and credit history — which is why it’s common for students to apply with a co-signer. Private student loans may have fixed interest rates, like federal loans, or variable rates that can change over the life of the loan. In general, these rates are often higher than federal student loan rates.
You’re responsible for paying all of the interest that accrues on your private student loans, though repayment terms will vary depending on your specific loan details.
Read more: Federal or private student loans? Here’s the difference
