Thursday, June 20, 2024
Hawai'i Free Press

Current Articles | Archives

Tuesday, July 12, 2016
Report: $10K ‘Affordability Gap’ for Hawaii College Students
By News Release @ 3:10 PM :: 5344 Views :: Hawaii Statistics, Higher Education, Cost of Living


by Mark Huelsman, July 12, 2016 (excerpts)

Across the political spectrum, there is widespread recognition that the rising price of college—particularly at public institutions that educate the majority of students—is a product of bad, or indifferent, public policy over a series of decades. That average student debt continues to skyrocket is but one warning sign that our system has gone dangerously off course. Student loan defaults continue to rise even in a healthier post-recession economy, and many worry about the impact of student debt and high college costs on millennial economic security and the ability to earn enough to achieve a middle-class life. This problem has a class and a color: black students are more burdened with student debt, despite the fact that college often confers fewer benefits on them.

Today’s students could be forgiven for thinking that they are now priced out of one of our few remaining ladders of opportunity. And efforts to increase the supply of college graduates will forever be compromised so long as costs and prices continue to expand well beyond the rate of inflation and wage growth. There are plenty of causes of the affordability squeeze, including disinvestment at the state level as more students enter the higher education system, and the failure of need-based aid such as the Pell Grant to keep pace with increases in tuition, fees, and living expenses. But today’s students are not only dealing with the rising cost of college and student debt, but increased cost of child care, stagnant wages for all but the very wealthy, and a system that now requires workers to fund nearly the entirety of their future retirement savings.

Because of this, many are proposing bold solutions to address the affordability crisis—from debt-free public higher education to tuition-free community college and expanded student loan forgiveness. These efforts will continue to be debated in the 2016 election and beyond, but they would benefit from a shared definition of what “affordable college” actually means. To this point, the term “affordability” has rested more on values and feelings than a shared formula. In some ways this makes sense, as the benefits of college vary by luck, academic preparedness, the strength of the macroeconomy, and the type of institution students are able to attend. But without a definition that colleges, states, and the federal government can use, we run the risk of improperly targeting resources, ineffectively aligning efforts to fund the system, and leaving students feeling like college is financially out of reach.

This analysis attempts to use one definition of affordability—the Rule of 10, created by a consortium of experts convened at Lumina Foundation—to figure out which states have affordable college for which students. Simply, the Rule of 10 states that college is affordable if students can meet the total net price through 10 hours of work per week and 10 percent of a family’s discretionary income over 10 years. Using this benchmark, we examined the average net price for low-income students in every state at both public four-year colleges and community colleges.

We also created two additional scenarios—a worker returning to college after 10 years in the labor force making median earnings by race, and a student paying the average net price nationally and taking on student debt—to see how this benchmark holds up for the average student, by race. 

Our findings include:

  • The average net price for low-income students—those from families making $30,000 or less—is unaffordable in all 50 states at both public four-year colleges and community colleges.
  • The “affordability gap” varies from slightly over $10,000 for a four-year degree in Hawaii, to nearly $40,000 for students in New Hampshire.
  • At community colleges, the affordability gap ranges from just over $1,000 in Mississippi to $23,000 in New Hampshire.
  • Black and Latino students making the median income by race cannot accrue enough savings to make a dent in the projected net cost of college. Black adult learners face an affordability gap of over $18,000 ($7,000 more than white adult learners), and Latino adult learners face an affordability gap nearly twice as large as white learners ($21,000 to $11,000).
  • Among students who take on loans and earn the expected median income for college graduates, all workers still see an affordability gap. However, black and Latino students in our scenario face larger affordability gaps (over $12,000 and $14,000 respectively), than white and Asian students.
  • Doubling the maximum Pell Grant could make college affordable in up to 26 states, while increasing the minimum wage to $15 an hour could make college affordable in 7-8 states.

Between low wages and high net prices, no state can claim that the average four-year college is affordable for low-income students, using the Rule of 10. That said, there is substantial variation between states on this front. Hawaii, for example, leaves its poorest students with slightly over $10,000 to make up over four years. That gap could close considerably when Hawaii raises its minimum wage to $10.10 an hour effective in 2018 (which is also the wage that federal contractors will now earn due to a 2014 executive order). Despite not being affordable for students now, it would take a modest effort from Hawaiian policymakers and institutional leaders—as well as an additional two hours of work per week from students—to have their unmet financial need fulfilled. It’s no coincidence that Hawaii and North Carolina, the two states that come closest to making college affordable for low-income residents, fund higher education at levels well above the national average….

read … Full Report

PDF: Download


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii