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

Source: Mark Huelsman, Dēmos, 2016

From the summary:
Because of this, many are proposing bold solutions to address the affordability crisis—from debt-free public higher education to tuition-free community college and expanded student loan forgiveness. These efforts will continue to be debated in the 2016 election and beyond, but they would benefit from a shared definition of what “affordable college” actually means. To this point, the term “affordability” has rested more on values and feelings than a shared formula. In some ways this makes sense, as the benefits of college vary by luck, academic preparedness, the strength of the macroeconomy, and the type of institution students are able to attend. But without a definition that colleges, states, and the federal government can use, we run the risk of improperly targeting resources, ineffectively aligning efforts to fund the system, and leaving students feeling like college is financially out of reach.

This analysis attempts to use one definition of affordability—the Rule of 10, created by a consortium of experts convened at Lumina Foundation2—to figure out which states have affordable college for which students. Simply, the Rule of 10 states that college is affordable if students can meet the total net price through 10 hours of work per week and 10 percent of a family’s discretionary income over 10 years. Using this benchmark, we examined the average net price for low-income students in every state at both public four-year colleges and community colleges.

We also created two additional scenarios—a worker returning to college after 10 years in the labor force making median earnings by race, and a student paying the average net price nationally and taking on student debt—to see how this benchmark holds up for the average student, by race.

Our findings include:
– The average net price for low-income students—those from families making $30,000 or less—is unaffordable in all 50 states at both public four-year colleges and community colleges.
– The “affordability gap” varies from slightly over $10,000 for a four-year degree in Hawaii, to nearly $40,000 for students in New Hampshire.
– At community colleges, the affordability gap ranges from just over $1,000 in Mississippi to $23,000 in New Hampshire.
– Black and Latino students making the median income by race cannot accrue enough savings to make a dent in the projected net cost of college. Black adult learners face an affordability gap of over $18,000 ($7,000 more than white adult learners), and Latino adult learners face an affordability gap nearly twice as large as white learners ($21,000 to $11,000).
– Among students who take on loans and earn the expected median income for college graduates, all workers still see an affordability gap. However, black and Latino students in our scenario face larger affordability gaps (over $12,000 and $14,000 respectively), than white and Asian students.
– Doubling the maximum Pell Grant could make college affordable in up to 26 states, while increasing the minimum wage to $15 an hour could make college affordable in 7-8 states.
Related:
Why you can’t work your way through college anymore
Source: Jillian Berman, Marketwatch, July 12, 2016

Low-income students can’t afford public college by earning minimum wage and getting grants.

Why debt-free college will not solve the real problems in America’s higher education system
Source: David H. Feldman, Robert B. Archibald, The Conversation, July 11, 2016

….We have been studying America’s higher education system and college costs. Our research tells us that the deep problems in American higher education today aren’t due to the fact that students borrow or pay tuition. It is because the schools serving the bulk of America’s underprivileged students are increasingly resource-starved.

So, what should our candidates be worrying about when it comes to higher education? And what policies might make a dent in our real problems?…