Even after taking into account grants and scholarships, paying for college is still a significant burden for students from the lowest-income families – and it’s a more severe financial strain than for those from any other income group, according to a new report.
Overall, students from the lowest income group – those from families making $30,000 or less – would have to spend 77 percent of their total income to cover the average net price of attending a four-year institution, and 50 percent for a two-year school, according to the report, published by the Institute for College Access and Success (TICAS). In fact, in 15 states and the District of Columbia, TICAS found the net price for the lowest income students at a four-year institution would on average be more than 100 percent of their family’s total income.
Meanwhile, students from families making more than $110,000 – the highest income group – would have to spend 14 percent of their total income to attend a four-year school, and 8 percent to attend a two-year school.
The strain on low-income families is even more pronounced when examining a family’s discretionary income. After paying for basic necessities, families in the lowest income group have no discretionary income to spend on paying for college, but would still need to cover $9,310 to pay for a four-year school, and $6,057 on average for a two-year school.
“College prices alone don’t tell you whether they’re affordable for a given family,” said Debbie Cochrane, vice president of TICAS and a co-author of the report, in a statement. “The net price of college may be lowest for the lowest income families, but a family living on $30,000 per year cannot realistically devote more than half of its income to college and still cover basic necessities.”
The burden for low-income families varied widely across different states. To pay the average net price for a four-year college as an in-state, full-time student, the share of total family income for the lowest income students ranged from 146 percent in D.C. to 55 percent in California.
Even in states where the affordability gap to pay for a four-year college is smallest – in California, Washington, and New York – the income share for the neediest students is still more than three times higher than for the wealthiest students.
“We will not achieve equity in college enrollment and completion until federal and state student aid recognize the full cost of attending college and direct more aid to those with the greatest need,” said Lindsay Ahlman, a senior policy analyst at TICAS and co-author of the report, in a statement.
In order to better address the issue of college affordability, the authors said policymakers should focus on strengthening the federal Pell Grant program and increasing the maximum award. Researchers have noted that the value of the Pell Grant has declined over time. At one point, the maximum award covered more than half of college costs. Today, it covers about a quarter of the cost of college.
The authors also suggested increasing and improving state grant aid by targeting more awards to students based on financial need, and promoting state investment in public higher education by creating a federal-state partnership “aimed at maintaining or lowering the net price of public college” for students.
“While there is no single standard for what it means to be affordable, the shares of family income required for low- and middle-income students to cover the net price of college should give policymakers pause,” the report said. “Because higher income families have more ability to save for college and repay education debt, the shares of their annual income required to pay for college may be less meaningful indicators of affordability.”
Publication Date: 5/1/2017