Out of Reach? How a Shared Definition of College Affordability Exposes a Crisis for Low-Income Students

By Irene Cruz

A recent report from Demos analyzed which states offer the most affordable public four-year and community colleges for students by income levels and race. Using the “Rule of 10” crafted by a working group convened by the Lumina Foundation, colleges are deemed affordable for students if their net price can be met with 10 hours of minimum-wage work per week throughout the year, as well as 10 percent of a family’s discretionary income saved over 10 years. The analysis calculates the affordability gap for low-income students by comparing the average net price of both two- and four-year degrees for low-income students in each state by the amount students can earn from work while at school. The report also explored whether college is affordable for Black and Latino adult students returning to college after working for a decade making median earnings by race.

Among the report’s findings:

  • The analysis found that in all 50 states, the average net price is unaffordable for low income students (households that earn less than $30,000) who attend public four-year and community colleges.
    • New Hampshire was found to be the least affordable state in the nation for community and four-year colleges.  Low-income students face an affordability gap of $40,000 for a four-year degree and over $23,000 for a two-year degree, far more than any other state.
    • Although no state was found to have affordable four-year colleges for low-income students, Hawaii had the smallest affordability gap of $10,109.
    • The smallest affordability gap at community colleges was in Mississippi at $1,000.
    • While the affordability gaps are calculated at the state level, there is variation within states at individual colleges. For example, California State University-Fullerton and California State-Fresno charge low enough prices for low-income students that the Rule of 10 would apply. The same holds true for several City University of New York campuses and the University of North Texas.
  • The report argued that if the maximum Pell Grant was doubled, the affordability gap for low-income students would be eliminated in 26 states.
  • An additional analysis the report performed was determining the affordability gap for Black and Latino adult learners who were returning to the work force after 10 years and after making the median income for their race. According to the analysis, these students would not be able to accrue enough savings to pay average net prices.
    • Black adult learners faced an affordability gap of over $18,000. Latino adult learners faced a gap of $21,000. By comparison, white adult learners averaged an affordability gap of $11,000 and Asian students an affordability gap of $1,081.