With contributions from Cynthia Liston & David Altstadt.

What is the difference between college affordability, total cost of attendance, and unmet need? Why does students’ economic security matter?

Economic security matters for college students because too many are failing to complete their education due to financial barriers. The fact is we need more students with postsecondary credentials to meet the demands of today’s jobs that pay a family-sustaining wage. Barriers to obtaining a credential include:

  • Rising college costs;
  • Decreasing “buying power” for federal Pell grants (the main financial support for low-income students), from covering 72% of average public college costs in 1972 to 30% today; and
  • Increasing numbers of college students of color and parents themselves who have, on average, fewer financial resources available to both pay for college and meet other basic needs and living expenses.

We experience substantial lost potential as a country when students can’t make ends meet and have to abandon their college pursuits. About 68% of high school graduates in 2011 enrolled in college, according to the National Center for Education Statistics. Of those who started at a community college, six years later only about 40% earned a degree. Lost along the way are aspirations, innovations, and talent of thousands who could not only change the trajectory of their lives for the better through a college credential – but that of the nation as well.

The conversation around economic security for postsecondary students represents a shift from the more common policy discussion of college affordability that has dominated headlines and legislative conversations for many years. While college affordability centers on rising tuition and fees (an important issue, no doubt), framing the issue around overall financial stability recognizes that it’s the total cost of attendance and unmet need that are most important to students.

Attaining a college credential depends on total cost of attendance, an amount that accounts for tuition, fees, books, food, transportation, housing, and personal expenses. Total cost of attendance varies because some students have greater financial responsibilities yet fewer resources than others. For example, about a quarter of college students are parents themselves and must support children while attending college. Even harder to account for, traditional-age college students from low-income families, particularly first-generation immigrant families, may need to contribute to their family’s household income to help support younger siblings or other family members.

Therefore, unmet need is a useful framework when considering economic security. This is the gap between total cost of attendance and what a student can pay through their own resources and traditional sources of federal and state financial aid, meaning it reflects the fact that not all students are in the same financial situation.

What do we know about students’ economic security today? How do some of these barriers affect college completion?

Postsecondary credentials are a route to economic security, but because financial aid is insufficient, low-income college students must work many hours, borrow money, or often both, to fill in the gap. While having a job in college can be just fine, research tells us that working more than 15 hours a week diminishes a student’s academic success and persistence. Even with work and student loans, however, students often find themselves strapped and facing serious challenges: a national survey of 66 colleges across 20 states found that 43% of community college students were food insecure, 46% experienced some level of housing insecurity in a year, and 12% were homeless. We also consistently hear from students about challenges around transportation, child care, and paying basic bills after covering their tuition, fees, and books.

The bottom line is that many low-income students are trying to ‘do the right thing’ by pursuing a postsecondary credential that will help secure their future, but the balancing act between working to help pay for college, covering other living expenses, and being a student too often doesn’t work.

What public policies affect students’ economic security at the federal and state levels? Are there current policy discussions or changes that funders should be aware of?

A helpful way to consider policy approaches around economic security for college students is to group them into three areas.

Meeting immediate needs. The first encompasses efforts to meet students’ immediate basic needs. For example, community college educators have long recognized that many of their students are ‘one road bump’ away from dropping out. An expensive car repair, medical bill, or some other unexpected expense can end enrollment for a semester and while sometimes students return in a future term, many do not. Other immediate needs are less visible but no less traumatic. As mentioned, hunger among college students is more common that most realize, and its impact on student focus and success is likely significant: it’s hard to learn when you are regularly skipping meals. Some key strategies have emerged to address low-income students’ basic needs, including campus-based food pantries and meal assistance, emergency aid funds, and housing assistance.

At the same time, there’s recognition that meeting students’ immediate basic needs, while vital, is mostly a band-aid approach to more systemic economic insecurities.

Connecting students to income supports and other resources. With this in mind, the public policy conversation that gets closer to the heart of the matter is around connecting students to income support and community resources, particularly federal benefits, that will improve overall financial health. Sometimes, students are eligible, but do not receive these benefits. Students may be unaware they qualify, may have struggled to navigate public systems, or may avoid benefits because of stigma. In some cases, college students are not eligible for benefits based on federal or state requirements and definitions.

Redesigning financial aid policies. Finally, a third policy area revolves around redesigning financial aid. The federal government plays a large role in financial aid for low-income college students, and so do states. Largely due to when financial aid programs were designed and their original intent, most financial aid goes to ‘traditional’ students matriculating directly from high school and attending full-time. Adult students, part-time students, and in some cases students who don’t attain certain standardized test scores or GPAs often have little access to aid. Nontraditional students are also most likely to transfer between postsecondary institutions, often putting them at a disadvantage for aid.

There are efforts to better direct financial aid where it’s needed. First, completion scholarships provide financial support to students near graduation whose other financial aid has been exhausted. Second, some states are designing need-based aid to better support a variety of enrollment intensities and patterns. Students frequently mix full- and part-time status, as well as move between two- and four-year colleges. State aid should not only follow the student, but also be flexible enough to shift based on these decisions. Finally, states can adjust aid policies toward high-need students with an eye toward boosting completion by expanding who is eligible, tackling process barriers excluding many adult students, prioritizing need over merit, and implementing more holistic policies that recognize the total cost of attendance and unmet need, not just tuition and fees.

At the federal level, there are also policy conversations taking place about expanding Pell grants, the primary source of financial aid for low-income students, to include short-term workforce credentials for adults with financial need who want to re-tool for new careers.

What does the latest research tell us about public policies and programs that help students persevere and attain a postsecondary credential of value?

While there has been substantial research into and evidence around how insufficient access to food and safe housing negatively impacts academic success of K-12 students for many years, the research focus on these same issues at the postsecondary level has been less robust, and the evidence base is still emerging. Complicating research design is that many strategies seek to connect students to several types of support rather than just one because needs are so great and interrelated.

However, HOPE Lab at the University of Wisconsin is analyzing the outcomes of specific basic needs interventions, with results expected beginning in 2019, and it will be interesting to see the differences in student outcomes that come from the food, meal voucher, and housing assistance programs they are studying.

Meanwhile, there is emerging research indicating that holistic efforts to support students beyond traditional financial aid have a positive impact. For example, Arkansas’s Career Pathways Initiative (CPI) is a state level cooperative effort between the Arkansas Department of Higher Education and the Arkansas Department of Workforce Services that uses federal TANF dollars to pay for a coach or navigator at community colleges to work with students below 250% of the federal poverty line to improve financial stability. An external evaluator found that since its inception in 2006, twice as many CPI students completed a credential compared to non-CPI students with a state return on investment of about $1.75 for every dollar spent.

In addition, research from CLASP examined seven community colleges providing benefits access to their students across a number of initiatives. They found students who receive two or more public benefits (such as SNAP or TANF) enrolled in more semesters, earned more credits, and completed a credential than students receiving only one benefit.

What can funders do in their states and communities to address the economic insecurities of postsecondary students?

There are important roles that funders can play to advocate for and support access to and completion of postsecondary credentials and we would encourage them to dig in on any of the issues discussed so far. There are parallels between this conversation about economic security and those happening in the K-12 space around the root causes and systemic challenges that poverty and other adverse childhood experiences have on academic success in children. Funders can help community members and policymakers see connections – if a child in poverty needs free school lunch in high school, it’s not difficult to understand why that same student might still face food insecurity – and other challenges – the following year as a community college student.

Finally, as we’ve discussed here, there are levers at communities’ disposal to improve postsecondary students’ economic security. Helping a community take a broad approach toward increasing access to benefits and connecting students to community resources places colleges as an integral part of an ecosystem of players. It requires building partnerships between colleges, state agencies, and county governments that administer federal programs, as well as with local community-based organizations that provide myriad services.

Funders can support communities by catalyzing those partnerships and helping them align and leverage supports for low-income college students. Funders can also be instrumental in building awareness of key issues and supporting needed research.