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For many parents, giving their children a college education is a priority. After all, a college degree often means better income and a better standard of living in the years ahead.
Unfortunately, there are some uncomfortable truths about securing a college education that families are sometimes reluctant to face.
But, while those facts can be challenging, they can be overcome with the proper planning and knowledge. Some, especially those looking to plan for college costs, opt to consult a financial professional about options.
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The first step in finding those solutions is understanding what the realities are.
Cost vs. savings: A mismatch
How much a college education costs often well outstrips how much the typical family saves for it.
Here’s a look at full-time average annual college tuition, not including room and board, across the nation for the 2025–2026 school year from the College Board:
- Public four-year in-state: $11,950.
- Public four-year out-of-state: $31,880.
- Public two-year in-district: $4,150.
- Private nonprofit four-year: $45,000.
Adding in room and board can significantly add to these costs, particularly in parts of the country where the cost of living is relatively high. Most students don't pay the full sticker price — grant aid and institutional discounts in some cases can significantly reduce the out-of-pocket cost. (Related: Colleges offering substantial financial aid)
Still, many families haven’t saved enough to cover a good portion of those costs for a year, much less four years.
Most college savings are in tax-advantaged 529 college savings plans, according to Sallie Mae, outpacing other college savings alternatives. However, the average 529 plan balance stands at around $27,900, according to one analysis of 2025 data. That number varies widely depending on family demographics and income level. The median account size was around $9,500.
Given that savings often fall short of the total college bill, many families look for other sources of funding. Most need-based aid begins with the Free Application for Federal Student Aid (FAFSA).
Think a scholarship might be in the offering? The uncomfortable truth is that might be less of a possibility than you think.
Scholarships fall short
Only about 1 in 9 college students win an academic scholarship, according to an analysis by the research outfit Education Data Initiative, using 2024 government data. The average amount received is about $4,100 a year for a public two-year program and $18,670 for a private four-year program. (Related: How to secure a scholarship)
Very few students get $25,000 or more in scholarships each year (only about 0.1 percent). Among the students who win scholarships, 97 percent win $2,500 or less.
How about an athletic scholarship? Fewer than 2 percent of high school athletes receive some sort of scholarship to compete in college. (Related: The college athletic scholarship challenge)
Debt load for graduation
Because of the hard financial realities above, many college graduates incur a significant debt load along with their degree.
Indeed, according to one analysis:
- About 61 percent of college graduates had some type of student loan debt.
- The average debt load was $35,639.
- 59 percent of graduates from public colleges had loans (average debt of $31,960).
- 61 percent of graduates from private, nonprofit colleges had loans (average debt of $39,510)
Such loans can become a serious or even unmanageable burden, especially for those just starting out in careers and life.
Failure to repay student loans can have serious financial consequences for borrowers, including:
- Collection fees.
- Wage garnishment.
- Money being withheld from income tax refunds.
- Deductions from Social Security and other federal payments.
- Damage to credit scores.
- Ineligibility for other aid programs, such as help with homeownership.
These outcomes can also adversely affect a family’s financial security.
This kind of debt risk is leading more families to carefully weigh the cost-to-income return on their chosen field of study. (Learn more: Are student loans worth it? The ROI on college)
Realities, not barriers
None of these uncomfortable truths about college financing is insurmountable. There are ways that college savings can get a boost and debt loads can be managed. (Learn more: 6 ways to cut college costs in half)
Understanding how can sometimes take knowledge and guidance. That’s where many people turn to a financial professional for help. (Need a financial professional? Find one here)
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Frequently Asked Questions about college cost challenges
Q. What is a 529 plan and why do most families use it for college savings?
A. A 529 college savings plan is a tax-advantaged account designed specifically to save for education expenses — contributions grow tax-free and withdrawals are tax-free when used for qualified education costs. They're the most widely used college savings vehicle in the U.S., with more than 17 million accounts holding over $600 billion in assets as of late 2025.
Q. How much should I have saved for college by the time my child enrolls?
A. The average 529 college savings plan balance is around $27,900, but that typically covers less than a full year at many institutions. A financial professional can help you build a savings goal based on your child's age, your target schools, and other funding strategies you plan to use.
Q. What are the serious consequences of defaulting on student loans?
A. Defaulting on student loans can trigger wage garnishment, withholding of tax refunds, deductions from Social Security payments, collection fees, and lasting damage to your credit score. These consequences can also affect your ability to qualify for other forms of credit, including homeownership assistance programs.
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Discover more from MassMutual …
Balancing student loans and retirement saving
9 ways to save on college...without a scholarship
This article was originally published in June 2021. It has been updated.
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