To bridge the gap, some schools are offering substantial financial aid packages, according to The Princeton Review.

The federal student loan system is facing a massive overhaul, which could result in less college aid. But higher education is only getting more expensive.

College tuition has surged by 5.6% a year, on average, since 1983, significantly outpacing other household expenses, a recent study by J.P. Morgan Asset Management found.

For the 2024-25 school year, tuition and fees plus room and board for a four-year private college averaged $58,600, up from $56,390 a year earlier, according to the College Board. At four-year, in-state public colleges, it was $24,920, up from $24,080.

And yet, the Trump administration’s budget proposal for fiscal 2026 calls for scaling back financial aid, including reducing the maximum federal Pell Grant award to $5,710 a year from $7,395, as well as curbing the federal work-study program. The proposed cuts would help pay for the landmark tax and spending bill Republicans in the U.S. Congress hope to enact.

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“Inflation and cuts in federal and state spending are causing schools to increase tuition, in some cases dramatically,” said Robert Franek, editor in chief of The Princeton Review.

However, “it’s really not what colleges are charging that matters, it is what actual students and families are paying after scholarships and grants are deducted — that’s what students and their parents need to focus on,” Franek said.

Grants are considered the most desirable kind of financial assistance because they typically do not need to be repaid. “Grants are the magic word,” Franek said.