Gas isn’t the only thing getting more expensive this year
Key takeaways
College costs keep climbing
At several well-known schools, the total cost of a four-year education has risen double digits in just three years, a concrete data point to anchor the conversation with clients.
Time is a valuable asset
The earlier clients start funding a CollegeBound 529 account, the more they may benefit from compounding, and the less they may need to contribute out of pocket.
Rising costs a potential reason to save more, not less
Higher gift limits, state tax benefits and family contributions give financial professionals several levers to help families close the gap faster.
Your clients have likely noticed higher prices at the pump this summer, but they may not be aware that tuition bills have been climbing far longer, and far faster, than a tank of gas. As families head back to school this fall, it’s a timely opening to revisit education funding with clients and show them where college costs have been headed and what they can do now to potentially stay ahead of them.
The same principle that makes rising costs feel daunting also works in a client’s favor when they save. Start early, invest consistently, and let time do the rest.
College costs have been rising faster than many clients think
Sticker prices vary widely by school, but the direction has been consistent. For the 2025–2026 academic year, average published tuition and fees reached $11,950 at public four-year in-state institutions and $45,000 at private nonprofit four-year colleges, increases of $340 and $1,750 over the prior year. Once room, board, books, and other expenses are added in, the average total budget runs closer to $31,000 for in-state public students and $65,000 for private nonprofit students.1
At many brand-name schools, the full cost of attendance is even higher. The table below shows how the total annual cost has changed at four institutions over just three years, a useful visual to share with families who may be underestimating the pace of increases.
School |
2023–2024 |
2026–2027 |
Dollar increase |
Percent increase |
|---|---|---|---|---|
Baylor University |
$74,269 |
$90,842 |
+$16,573 |
+22% |
University of Southern California |
$91,310 |
$103,162 |
+$11,852 |
+13% |
Duke University |
$83,263 |
$103,180 |
+$19,917 |
+24% |
University of Miami |
$88,938 |
$98,872 |
+$9,934 |
+11% |
Figures reflect total annual cost of attendance, including tuition, fees, and room and board, as reported by each institution.2
For most families, the question isn’t whether college will cost more by the time their child enrolls. They know it almost certainly will. Our latest flyer highlights these rising costs at well-known universities across the country. The real planning question is how much of that cost they fund from savings built over time versus loans taken on later.
Why starting early is critical
A CollegeBound 529 account is built for exactly this kind of long-horizon goal. Contributions grow tax-deferred, and withdrawals are tax-free when used for qualified education expenses.3 That tax-free growth may become more favorable the longer money stays invested, which is why the timing of a family’s first contribution often matters more than its size.
Consider two families who each set aside $250 a month. The one who starts when a child is born and contributes for 18 years could accumulate roughly $96,800, assuming a 6% average annual return. A client who waits until the child turns nine has only nine years to save. Even at the same monthly amount, they reach about $35,700.4
Automating contributions makes this easier for families to sustain. A set monthly or quarterly transfer keeps them on track without requiring a decision each time, and it spreads contributions across market ups and downs rather than trying to time them.
Rising costs a potential reason to invest more
If costs are climbing, the natural response may be to increase a family’s saving contributions. A few levers may help.
Take advantage of the annual gift tax exclusion. In 2026, parents can contribute up to $19,000 per child, or $38,000 for married couples, without gift tax consequences. Those in a position to front-load can use the five-year election, called superfunding, to contribute up to $95,000 at once as an individual or $190,000 as a couple, giving that money more time to potentially grow.
Bring the whole family in. Grandparents, aunts, uncles and family friends can all contribute directly to a child’s CollegeBound 529 account, made easier through simple online tools like Ugift®. For clients doing estate or multigenerational planning, it may be an efficient way to move assets to the next generation.
And don’t overlook state tax benefits. Many states offer a tax deduction or credit for 529 contributions, which lowers the real cost of every dollar a client saves. It’s worth confirming what a client’s state offers before year-end.5
New rules mean more choices
A common hesitation is what happens if a child doesn’t follow the expected path. CollegeBound 529 has more built-in flexibility than many clients realize. 529 savings can be used for more than just college or graduate school. Families can also use these funds for trade and vocational programs, up to $20,000 per year for K-12 tuition, and for certain apprenticeship programs. If one child doesn’t need the money, the beneficiary can be changed to a sibling or other family member. And under the SECURE 2.0 Act, up to $35,000 in unused funds can be rolled into the beneficiary’s Roth IRA, subject to holding periods and annual limits.6 In other words, financial professionals can reassure clients that the money they set aside rarely goes to waste.
Getting started this fall
Back-to-school season is a natural checkpoint, and a timely reason to reach out. It’s a good moment to help clients open a CollegeBound 529 account if they haven’t already, set up an automatic contribution, or revisit the amount if there’s room to increase it. Financial professionals can also use the conversation to align the investment mix with each client’s timeline and coordinate 529 savings with the rest of the financial plan.
College may cost more every year, but a client’s response to it doesn’t have to be complicated. Start early, save consistently, and let time and tax-free growth do the work, with a financial professional keeping the plan on track.
