News & Events / New Analysis Finds Most Families Can’t Cover College Costs

New Analysis Finds Most Families Can’t Cover College Costs

Published Aug 18, 2023

By Sara Weissman, Inside Higher Ed

A new data analysis from the Institute for Higher Education Policy found that most students have unmet need and experience gaps between what their families can pay and their college costs. Those gaps are significantly larger for students of color and low-income students compared to white students on average.

The analysis, released on Wednesday, draws on data from the U.S. Department of Education’s 2019-20 National Postsecondary Student Aid Study. It found that 90 percent of students who received a Pell Grant, federal financial aid for low-income students, still have unmet need, compared to 56 percent of students who never received a Pell Grant.

The majority of students, across racial and ethnic groups, have unmet need, though minority students struggle with these financial gaps at higher rates. According to the analysis, 88 percent of Black students, 82 percent of Hispanic students and 78 percent of Asian students, Native American students and Native Hawaiians and Pacific Islanders have unmet need, compared to 68 percent of white students.

The analysis also found the average amounts of unmet need vary widely by race and socioeconomic status. Pell Grant recipients had an average unmet need of about $9,800, while students who never received a Pell Grant could generally cover college costs using grants and family money with an estimated $5,000 leftover on average.

Black students had the highest average unmet need among racial groups, almost $9,000, compared to $6,568 for Asian students, $6,352 for Hispanic students, $5,447 for Native American students and $5,313 for Native Hawaiians and Pacific Islanders. White students, on average, could cover their college costs with about $300 to spare.

The analysis also delves into the percentage of household incomes families need to spend to pay for college depending on their socioeconomic status. Students from families with the lowest incomes had to spend 148 percent of their household incomes to pay for full-time enrollment at a four-year college. Families with low incomes had to spend 51 percent, while middle-income families and high income families needed to spend 35 percent and 24 percent, respectively.

Read the full article at Inside Higher Ed.