JPMorgan flags tuition surge as families face mounting college funding strain

JPMorgan Asset Management has released its latest annual college savings guide, warning that steadily rising tuition and escalating student debt are reshaping the financial outlook for millions of families.

Now in its 13th year, the firm’s 2026 College Planning Essentials report provides updated data and practical strategies aimed at helping parents and advisers prepare for the growing cost burden of higher education.

“Planning for college is one of the most important financial decisions families make, and the landscape is constantly evolving,” said Tricia Scarlata, head of education savings at JPMorgan Asset Management. “College tuition has increased 914% since 1983, far outpacing all other household expenses. With costs and student debt continuing to rise, it's more important than ever for families to make informed choices and maximize their savings.”

The report highlights the rapid expansion of student borrowing over the past two decades. Total outstanding education debt has jumped 343% since 2005 — significantly faster than tuition itself — and nearly all graduates with loans say they have delayed major life milestones such as buying a home or starting a family.

Financial aid growth has also lagged tuition increases, widening the gap families must cover. Over the past 10 years, in-state public university costs have risen 45%, while total aid has climbed just 11%. As a result, households now finance roughly 48% of college expenses using income and investments, up from 38% about 12 years ago.

Despite the growing challenge, the guide notes that many families are still not using tax-advantaged savings vehicles. Around 60% of households do not contribute to 529 plans, instead relying on cash, taxable investment accounts or even tapping retirement savings to meet education costs.

Recent rule changes have expanded the flexibility of 529 plans. Families can now roll over up to $35,000 per beneficiary into a Roth IRA tax-free under certain conditions, and eligible uses have broadened to include K-12 tuition, special-needs programmes and some credential-based education paths.

Among those who do save through 529 plans, automatic investing features are helping to drive consistent contributions. The report found that 83% of participants fund accounts regularly via payroll deduction or bank transfers, reinforcing the importance of starting early and maintaining disciplined saving habits.