Postsecondary affordability is determined by “institutional price, the adequacy of state effort to meet students’ financial need, and students’ personal or family income.”¹ The cost of tuition and fees and the availability of financial aid or scholarships all factor into whether or not a student can afford to attend a postsecondary institution. A student can receive all the preparation necessary to succeed at the postsecondary level and still not be able to afford a college education. Because affordability increases opportunity for low-income students, state policymakers should consider the needs of disadvantaged families when establishing tuition and financial aid policies.

Over the past two decades, changes in state funding, tuition and financial aid have made postsecondary affordability a growing problem. While the average cost of college tuition has risen by 110% over the past 20 years, median family income has risen by only 27%.² And while state and federal support for financial aid has increased over the past decade, it has not kept pace with tuition increases.

From 1991 to 2001, the purchasing power of a Pell Grant – the largest need-based financial aid program in the country – decreased by half.³ The popularity of merit-based scholarships also has cut into the amount of funding states devote to need-based financial aid. Between 1981 and 2000, the percentage of aid that states allocated on the basis of need declined from 91% to 78%.⁴ The amount of borrowing by students of all income levels has also dramatically increased over the last two decades. Since 1980, loans have overtaken grants as the primary form of financial aid for postsecondary students.⁵ Those who borrow incur large debts that often are difficult to pay back – especially when students fail to complete their education.

The rising price tag of a college education, coupled with a decline in need-based aid, places low-income students in jeopardy of not being able to continue their education at the postsecondary level. Studies show that the price of tuition and the amount of financial aid available heavily influence low-income students’ decision on whether to apply to and attend college.⁶ In the new knowledge-based economy, affordable postsecondary education is more critical than ever.

One example of a state that has tried to curtail tuition increases is Ohio where Governor Bob Taft proposed a 6% cap on all future public four-year university tuition hikes in the state.⁷ Opposition from some college leaders in Ohio and an ongoing state budget crisis may force a reconsideration of this policy. Still, as state spending decreases and tuition increases, innovative approaches to the issue of declining affordability will become necessary if postsecondary education is to fulfill its potential. For more information about postsecondary affordability, consult the National Information Center for Higher Education Policymaking and Analysis and the National Center for Public Policy and Higher Education

¹ The National Center for Public Policy and Higher Education, Losing Ground: A National Status Report on the Affordability of Higher Education (San Jose, 2003) 11.

² The College Board, Trends in College Pricing, 2001 (New York: The College Board, 2001).

³ The National Center for Public Policy and Higher Education, Losing Ground, 6.

⁴ The College Board, Trends in Student Aid, 2002 (New York, 2002).

⁵ The College Board, Trends in Student Aid, 2001 (New York, 2001).

⁶ The National Center for Public Policy and Higher Education, Losing Ground. See also The National Center for Public Policy and Higher Education, College Affordability in Jeopardy (San Jose, 2003).

⁷ Ohio State University will be allowed a 9% cap, under the governor’s plan, to allow it to catch up with tuition levels at other colleges.

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