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Understanding Unmet Need

UNDERSTANDING UNMET NEED: WHEN COLLEGE COSTS OUTPACE STUDENTS’ FINANCIAL RESOURCES

THE GAP BETWEEN WHAT A STUDENT CAN AFFORD AND WHAT THEY MUST PAY FOR—KNOWN AS UNMET NEED—VARIES WIDELY ACROSS DIFFERENT COMMUNITIES

Students and families are facing a college affordability crisis. As college costs rise, many are stretching their budgets, working long hours, and taking on debt because the cost of attending college far exceeds what they can realistically afford. While need-based aid and federal grants reduce some costs, they have not kept pace with increasing tuition and living expenses.

Our Understanding Unmet Need research examines how unmet financial need disproportionately affects students from underserved backgrounds, varying by race, ethnicity, income, and other factors. Our findings reveal systemic inequities and highlight the magnitude of unmet need for students from lower income backgrounds and immigrant backgrounds. Black, Hispanic or Latino, Asian American, American Indian and Alaska Native students each face distinct patterns of unmet need, with important variation based on country of descent.

These inequities are not inevitable. By shedding light on the varied ways unmet need impacts different student groups, we aim to inform stronger financial aid policies that put an affordable, high-quality postsecondary education within reach for every student.

College Affordability Still Out of Reach for Students with Lowest Incomes, Students of Color

Students of color and students from lower income backgrounds encounter many barriers when pursuing higher education, including affordability. Using the latest data from the National Postsecondary Student Aid Study (NPSAS), we examine how unmet need varies by race, ethnicity, and income. Our findings reveal that college costs often strain or exceed household incomes for the vast majority of students who have received a Pell Grant and students of color. For example, American Indian or Alaska Native, Asian, Black, Hispanic or Latino, Native Hawaiian or Pacific Islander students and students who have received a Pell Grant are more likely to face high levels of unmet need than their counterparts.

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Students from the lowest income backgrounds would need to contribute almost 150 percent of their household income to cover the full-time cost of a four-year college.

Unmet Financial Need is Widespread Among College Students. Federal Aid Helps Some, But Still Falls Short for Many.

The federal Pell Grant was established by Congress to support students with the greatest need, but under current grant award amounts, many grant recipients remain thousands of dollars away from covering their full cost of college attendance. Pell Grant recipients of all racial and ethnic backgrounds have alarmingly high levels of unmet need, but they are not the only ones affected by the affordability crisis. More than half of students across all racial groups who never received a Pell Grant still have unmet need. This analysis discusses average unmet need trends and the urgent importance of protecting and increasing the Pell Grant. Strong federal support, alongside state and institutional investments in financial aid, can help ensure all students benefit from the social and economic mobility higher education can provide.

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Nine in ten students who have received a Pell Grant still face unmet financial need, often falling short of college costs by thousands of dollars.

College Affordability Remains Out of Reach for Immigrants of Color Throughout Generations

Race and income are not the only factors that impact students’ ability to afford college. Immigrant students and their descendants face additional challenges, including limited access to financial resources, difficulty navigating complex U.S. financial aid systems, and restrictions on eligibility for financial aid and work-study programs based on their documentation status. As immigrants and their descendants make up a growing segment of the college-going population, understanding how these factors intersect with race and ethnicity adds a crucial layer to the picture of unmet financial need. This brief examines how immigrant students of color, and Black immigrants in particular, face high levels of unmet need across generations.

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Black immigrant students faced the highest average unmet need by a considerable margin, and that burden remained high even for Black students who had been in the U.S. for three or more generations.

College Costs Keep Rising. Disaggregated Data Show the Asian American and Hispanic or Latino Students who Face the Greatest Affordability Gaps

Escalating higher education costs pose substantial challenges for students from Asian American and Hispanic or Latino diasporas. Using disaggregated data, this analysis examines how unmet need varies based on students’ country of descent, ethnic heritage, and generational status. By comparing first, second, and third-generation American students from different countries of descent, we highlight how cultural, socioeconomic, and educational differences shape students’ financial realities and experiences within college. Financial aid policies such as increasing the Pell Grant or funding first-dollar free college programs are critical to ensuring students from low-income backgrounds and historically underserved communities can access, afford, and succeed in college.

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