“We have to make college affordable for every American,
because no hardworking student should be stuck in the red.”

President Barack Obama, 2016

“One of the central problems of our outdated higher
education system is that it has become increasingly
unaffordable for those who stand to benefit the most.”

Senator Marco Rubio (R-FL), 2015

Across the political spectrum, there is widespread recognition that the rising price of college—particularly at public institutions that educate the majority of students—is a product of bad, or indifferent, public policy over a series of decades. That average student debt continues to skyrocket is but one warning sign that our system has gone dangerously off course. Student loan defaults continue to rise even in a healthier post-recession economy, and many worry about the impact of student debt and high college costs on millennial economic security and the ability to earn enough to achieve a middle-class life. This problem has a class and a color: black students are more burdened with student debt, despite the fact that college often confers fewer benefits on them.1

Today’s students could be forgiven for thinking that they are now priced out of one of our few remaining ladders of opportunity. And efforts to increase the supply of college graduates will forever be compromised so long as costs and prices continue to expand well beyond the rate of inflation and wage growth. There are plenty of causes of the affordability squeeze, including disinvestment at the state level as more students enter the higher education system, and the failure of need-based aid such as the Pell Grant to keep pace with increases in tuition, fees, and living expenses. But today’s students are not only dealing with the rising cost of college and student debt, but increased cost of child care, stagnant wages for all but the very wealthy, and a system that now requires workers to fund nearly the entirety of their future retirement savings. 

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.  


Key Findings

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.


Download the full report to read more



Demos would like to thank Lumina Foundation for their generous support of this project and leadership on the issues of college afordability and attainment. Tis paper is entirely the work of the author and Demos and does not necessarily refect the views of Lumina Foundation.