Savanna Hoffman
The cost of higher education has been a significant concern for students and their families. Surveys indicate that financial barriers are the primary reason why many do not pursue or complete college. While grants, scholarships, and aid can help, the rising cost of tuition and fees often outweighs the support, leading to student debt. This has caused many to question the economic value of a college degree. As a result, students from low- and middle-income backgrounds often cannot afford to attend college, with 95% of colleges being unaffordable for low-income students.
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What You'll Learn
Low-income students cannot afford 95% of colleges
College affordability is a significant issue in the US, with a report by the Institute for Higher Education Policy (IHEP) revealing that 95% of American colleges are too expensive for most low-income students. This problem is not new, but a recent analysis using net price data from 2,000 institutions highlights the extent of the issue. The analysis found that nearly half of the colleges were affordable for wealthy students from families with annual incomes above $160,000, and more than a third were only affordable for students with family incomes over $100,000. However, students from lower-income backgrounds could only afford 1 to 5% of colleges.
The report also revealed that public two-year and four-year institutions missed students' affordability thresholds by an average of $7,000 and $9,000, respectively. The gap was even wider for private institutions, with nonprofit colleges missing the mark by $16,000 and for-profit colleges by $18,000. Even when factoring in federal student loans, at least 70% of colleges remained unaffordable for lower-income students, both independent and dependent.
The high cost of college has significant implications for low-income students, often forcing them to work full-time while studying or take on substantial student loan debt. This can lead to poor academic performance and delay major life decisions such as starting a family or buying a home. Additionally, the report highlights the racial and ethnic disparities in college affordability, with students from certain minority backgrounds facing much larger "unmet needs" than their White peers.
To address these issues, the report makes several recommendations. These include protecting and strengthening the Pell Grant program, increasing direct investment in public colleges and need-based aid, managing institutional costs, keeping prices low for needy students, and providing transparent information to students about the costs and financial aid options. While these interventions may not solve the problem alone, they are important steps towards improving college affordability and accessibility for low-income students.
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38% of undergraduates take on debt
The high cost of college is a significant concern for Americans. A national survey revealed that 38% of undergraduates take on debt due to the high cost of college. This has forced students to take on substantial debt, impacting their future financial decisions and life choices.
The survey highlights the need for transparency in college pricing and financial aid offers. Prospective students often over- or underestimate their costs, and true transparency about the real costs of college could help more people pursue degrees and improve their earning potential. For instance, Ohio has passed a law requiring colleges and universities to disclose all costs, including class fees, room and board, and special charges.
The issue of college affordability is not new, and it has worsened over time. In the past, students could cover tuition fees by working a minimum wage job during the summer. However, today, low-income students cannot afford 95% of colleges, and even with federal student loans, at least 70% of colleges remain unaffordable for them. This inequity effectively shuts out a large portion of students from higher education.
To address this problem, various recommendations have been proposed, including strengthening financial aid programs, increasing direct investment in public colleges, managing institutional costs, and providing students with the information they need to make affordable choices. While these interventions may not solve the problem individually, they are important parts of a larger effort to improve access to higher education and ensure a better return on taxpayer and student investments.
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40 million Americans have some college but no degree
As of July 2021, over 40 million Americans have attended college but have not earned a degree. This is a 3.6% increase from the previous year, which equates to 1.4 million more students in the "some college, no credential" (SCNC) category. The SCNC population grew to 43.1 million at the start of the 2023-24 academic year, with 37.6 million people under the age of 65, a 2.2% increase from the previous year.
The high cost of college is a significant factor in the large number of Americans with some college but no degree. According to a survey, 72% of adults who have stopped out or never enrolled in college consider community college to be affordable, while only 23% consider private, not-for-profit, four-year colleges affordable. Furthermore, 38% of undergraduates are forced to take out loans, causing many to delay major life decisions such as starting a family or buying a home.
Financial barriers are not the only obstacles preventing students from completing their degrees. Emotional stress and mental health issues also play a role, with many currently enrolled students still struggling despite the lifting of pandemic-era restrictions.
To address these issues, states are focusing on increasing the percentage of adults with post-secondary credentials. The National Student Clearinghouse Research Center (NSCRC) collaborates with educational institutions to gather accurate data that can guide policy decisions. Initiatives such as scholarships, grants, and fellowships can also help make college more accessible to a wider range of students.
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61% of four-year students pay their own way
The cost of college is a significant concern for many Americans. A Lumina Foundation-Gallup poll revealed that college is too expensive for most Americans, with 38% of undergraduates taking on substantial debt. The survey also found that college price tags and financial aid offers are often confusing, with many students unsure of the actual costs.
The Cengage Student Affordability Survey found that 61% of four-year students are solely paying their education costs. This is a notable increase from previous years, with 37% of students using their own funds in 2019. The survey also showed that 29% of four-year students are splitting costs with parents or family, while 71% of two-year students pay all costs themselves. Affordability is a significant barrier for students, with tuition being the most significant burden.
The survey also highlighted that many students have little financial buffer, with nearly half having $250 or less left each month after paying education costs. This lack of financial flexibility can impact a student's ability to fully engage with their education and may lead to difficult trade-offs. Furthermore, 14% of students have only $100 or less left each month, indicating a very tight budget.
The financial burden of college is not limited to students but also affects their families. The survey found that 46% of students said it was a struggle for them or their family members to pay for their education. This struggle is not without consequences, as nearly one-third of enrolled students considered leaving school due to high costs.
The high cost of college has led to discussions and initiatives to improve affordability. Some suggestions include lowering tuition fees, providing more affordable course materials, and strengthening financial aid programs. For example, the University of California at Davis has partnered with other universities on a Reengagement Consortium, utilizing grant money to support students in completing their education.
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32% of students have loans but aren't making payments
The cost of college is a significant concern for many Americans. A national survey revealed that college is too expensive for most Americans, forcing 38% of undergraduates to take out loans. As a result, many borrowers struggle to make payments, delay major life decisions, and face confusing financial aid offers.
The issue of college affordability disproportionately affects lower-income students. A report found that out of 2,000 colleges, nearly half were only affordable for students from families with annual incomes above $160,000. More than one-third of colleges were only within reach for students with family incomes exceeding $100,000. In contrast, students from lower-income backgrounds could only afford 1 to 5% of the institutions.
The financial strain of student loans has been further exacerbated by the COVID-19 pandemic. The federal government suspended student loan payments for over four years, leading to confusion and disengagement from the repayment system. As of October 2024, student loan payments were due again, but less than half of borrowers resumed making them. This trend continued into 2025, with the share in current repayment dropping to 38%.
Among those struggling to repay their student loans, 32% have household incomes below $25,000. These borrowers often face higher financial insecurity and are less familiar with income-driven repayment plans. Additionally, a lack of engagement with the repayment system contributes to nonpayment, with many borrowers unsure how to contact the relevant authorities or navigate their options.
The consequences of nonpayment can be severe, including delinquency, default, and various financial penalties. With a significant number of students failing to make timely payments, there is a growing need for interventions to prevent widespread defaults and alleviate the financial burden on borrowers.
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Frequently asked questions
While there are no statistics that explicitly state the percentage of students who don't pay for college, there are various data points that provide insight into college affordability:
- 75% of Americans believe that people don't attend college due to financial constraints.
- 72% of adults who stopped or never enrolled in a postsecondary program consider community college affordable.
- 32% of students have student loans but are not making payments.
- 95% of colleges are unaffordable for low-income students.
The primary reason students don't pay for college is the cost and their inability to afford it. Other reasons include:
- Emotional stress and mental health issues.
- Needing to work immediately.
- Belief that a good living can be made without a college degree.
- Difficulty navigating the application process.
Students are more likely to attend college if they believe their families can afford to send them. Conversely, students are less likely to enroll if they believe their families cannot afford the cost.
