Prosperity Watch Issue 30, No. 1: Growing Costs Make Attending College More Challenging for Low-income Students

Over the last 10 years, college costs have skyrocketed, just as critical grant-based financial aid has covered less and less of these costs. Paying for college has often raised significant barriers for many of those wishing to attend. The need to work and make money is the number one reason students leave school before earning a degree or certificate. North Carolina students and their families have seen the cost of a college education increase during a time when a postsecondary education credential is becoming a necessity for an increasing number of jobs. As state funding for higher education has declined, and tuition and fees have increased in turn, attending college has become an increasingly costly proposition for students and their families.

Low-income students face considerable financial challenges in paying for college, and key grant aid programs such as the federal Pell grant help these students pay for their education. Many students who rely on Pell grants come from very poor families and this financial aid reduces the amount of loan debt these students incur. However, the ability of the Pell grant to make college more affordable has declined over time. In 1980, the maximum Pell grant fully covered the average in-state tuition and fees at public four-year colleges nationally. However, for the 2011-12 school year, the grant covered only 72 percent of such costs. For North Carolina, the average Pell grant covered just 67 percent of average tuition and fees for public colleges and universities within the state’s public university system.

Rising college costs and the declining impact of key grant aid programs are important issues for North Carolina. Since the 1999-2000 academic year, the share of total undergraduates in the state’s public colleges and universities who rely on Pell grants nearly doubled, while average tuition and fees more than doubled when adjusted for inflation.

Given these disturbing trends, it is critical that policymakers at both the state and federal levels confront the growing cost of postsecondary education in order to ensure that all qualified students are able to go to college without having to incur large amounts of student loan debt. At the federal level, policymakers can show their commitment to making college affordable by protecting the Pell grant program from further cuts. State lawmakers can demonstrate the same commitment by reversing the deep cuts made to the UNC System and the state’s community colleges made in recent budgets, which only serve to increase the cost of higher education for too many students.

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