American families are doubling down on college, even as sticker prices climb and policymakers continue to debate the future of federal student aid. The latest How America Plans for College 2026 report from Sallie Mae and Ipsos finds that 95% of high school students plan to continue their education after graduation, 90% of families view it as an investment in the student’s future, and 82% say it will be worth the cost.

The report is based on online surveys of 1,005 high school students ages 14–18 and 1,005 parents of high school students. It is the first update to the study since 2020, and the findings paint a picture of households that are more financially engaged than they were five years ago — saving earlier, planning sooner, and bringing teens into the conversation about how to pay. 

But the same data also exposes uncomfortable gaps: many families still do not know how scholarships work, when interest on student loans starts, or what graduates in their child’s intended field actually earn.

Commitment To Saving For College Is Rising

6 in 10 families considering higher education now have money set aside for it, and the average amount saved is $42,307 — up 61% from $26,266 in 2020. Sallie Mae and Ipsos note that the increase was driven primarily by higher-income households.

Most families still keep that money in normal general savings accounts (53%), while 39% use 529 college savings plans, which offer federal tax-free growth and tax-free withdrawals for qualified education expenses.

64% of families say they have a plan to pay for higher education, up from 54% in 2020. Among families of high school seniors, that figure rises to 77%. Students themselves are part of the conversation more often than they were five years ago: 78% of high school students report being involved in discussions about how college will be financed.

The willingness to stretch financially, though, is worrying. 83% of families considering higher education say they would extend their budgets to access the best educational opportunity, and 73% say they would rather borrow student loans than have their student forgo college altogether. Yet families also want guardrails: 68% agree there should be student loan borrowing limits, while only 10% disagree.

Family Impact: What This Means For Budgeting

These numbers have a big impact on budgeting for college. Even $42,307 in savings for college covers less than two years of in-state tuition, room, and board at most public four-year schools, and a fraction of a year at private colleges. That helps explain why 46% of families still expect to borrow for higher education — down from 54% in 2020, but still close to half.

What type of accounts families save in also makes a big difference. A 529 plan grows tax-free at the federal level and can be withdrawn tax-free for qualified expenses such as tuition, fees, books, and room and board, with many states layering on a state income tax deduction or credit for contributions.

The fact that 53% of families still rely on general savings (which are taxed as ordinary income and negatively impacts the FAFSA) suggests many are leaving meaningful benefits on the table. For a family contributing $300 a month over 15 years, the difference between a 529 plan and a taxable account can run into the tens of thousands of dollars depending on state tax treatment and investment returns.

Knowledge Gaps Undermine The Plan

Despite more interest in college, the survey suggests many families still don’t understand the financial aspects of it.

Fewer than 4 in 10 households say they have discussed expected starting salaries in the student’s field of interest (38%), and only about a quarter have looked at potential earnings compared with the cost of education (28%) or the school’s career placement rates (28%). Just 21% have discussed the average student debt that graduates carry in their chosen field.

Misconceptions about basic financial aid concepts remain prevalent. 48% of families believe scholarships are only available to students with good grades, even though many awards are based on financial need, demographics, intended major, athletics, or community involvement.

Just 37% know that families often pay less than the advertised sticker price because of grants, institutional aid, and merit scholarships.

Only 22% correctly identify when interest on most student loans typically begins to accrue (hint: when the loan money is sent to the school) rather than at graduation.

And while 64% can correctly identify the FAFSA as the application that qualifies students for federal grants, loans, and work-study, more than a third still cannot.

40% of families considering higher education say they feel they are on their own when it comes to planning and paying for college.

AI Is Changing Career Plans, But Not College Plans

The 2026 edition added new questions about artificial intelligence. 79% of parents and students agree that AI skills will be essential in many future careers, and 69% believe AI will create new job and career opportunities. 

At the same time, 46% worry AI may make it harder for the student to enter the workforce, and 37% say a parent has advised the student to reconsider career plans because of AI’s evolution. 

Roughly 28% report that the student has already changed career goals because of AI.

So far, AI concern has not dampened enthusiasm for college itself: only 5% of families plan no college education at all as a result. But the technology is shaping what students plan to study and how they think about their first jobs after graduation.

What Families Should Do Next

For families navigating these decisions in the coming years, the data points to several practical steps:

1. Create a “college payment plan” by sophomore year. Families with a plan report higher confidence in their ability to succeed and rough cost estimates and a savings target are enough to start.
2. Move education savings into a 529 plan where it makes sense. A 529 plan can compound tax-free, be used for tuition, room and board, and apprenticeship costs.
3. File the FAFSA every year even if you don’t think you’d qualify for aid. The form unlocks federal grants, work study, state aid, and many institutional scholarships, and several states now require it for high school graduation.
4. Run the numbers on starting salaries and career placement before choosing a school or major. The U.S. Department of Education’s College Scorecard and the Bureau of Labor Statistics’ Occupational Outlook Handbook are free.
5. Understand how student loans work. For unsubsidized federal loans and private student loans, interest starts accruing as soon as the funds are disbursed, not at graduation.

The Sallie Mae and Ipsos data makes one point clear: American families still believe in college, are saving more for it, and are bringing teens into the conversation earlier than ever. The next step is closing the information gap before they sign on the dotted line.

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