More Than Tuition: The Impact of the Costs of College

By: Roberto Villegas-Gold, 2025 Excelencia Policy Fellow

All Americans should be able to afford higher education and obtain a college degree. Yet, 43 million adults in the United States have attended some college but never received a degree.¹ About 56% of adults who never enrolled or previously enrolled but dropped out say cost is the main reason why they have not enrolled or reenrolled in college.² Many of these adults stopped out³ because of increased basic needs insecurity or the burden of non-tuition related financial costs of housing, transportation, food, healthcare, childcare, and technology.⁴ As our country positions itself as a knowledge-based economy, a well-educated workforce is critical. Lawmakers at the national level have an opportunity to expand eligibility to state and federal benefits programs, improving affordability and resulting in an increase in the number of Americans entering, persisting, and completing college and, ultimately, entering the competitive workforce.

Sources: Cohen, J., Causey, J., Randolph, B., Holsapple, M., and Shapiro, D. (June 2025), Some College, No Credential Student Outcomes, Annual Progress Report — Academic Year 2023/24, Herndon, VA: National Student Clearinghouse Research Center. Gallup and Lumina Foundation. (2024). Cost of college: The price tag of higher education and its effect on enrollment. Gallup and Lumina Foundation. (2025). The state of higher education 2025.

College Affordability

Colleges and universities are grappling with how to address the financial barriers to higher education. Many Americans are making a difficult decision to forgo or drop out of college because they believe it is in their best interests to work and earn money, and not assume the additional financial burden of student loans and other college-related costs. Lawmakers and institutions must ensure that educational options are available and accessible to Americans. This is not just important to individuals’ careers and financial states, but it is also critically important to the future of the U.S. economy. The fastest-growing industries within the U.S. require workers with disproportionately higher education levels compared to industries with slower growth.⁵ By 2031, it is projected that healthcare services, professional and business services, government and public education services, and leisure and hospitality services will grow the fastest.⁵ This means that over 72% of jobs will require some kind of education beyond high school. Lumina Foundation’s analysis found that only 54% of U.S. adults currently meet this education threshold.⁶

College affordability and supporting students with their financial barriers are more important than ever for both institutions of higher education and lawmakers. Increasingly, institutions of higher education are acknowledging that students cannot be expected to achieve academic success or personal well-being until their basic needs are met. Supporting food and housing security on campus has become a crucial priority for addressing not only student success and retention but completion and entry into the workforce to become active and productive members within the economy.

Source: Hope Center for Student Basic Needs. (2025). The Hope Center 2023–2024 Student Basic Needs Survey Report.

Investing in Basic Needs Promotes Thriving Communities and Economies

There has been substantial movement in supporting students’ basic needs insecurity, precisely because institutions of higher education have had to acknowledge that insufficient food and housing undermine postsecondary educational experiences and credential attainment for our students. Food and housing insecurity undermine academic success and have a particularly strong, meaningful relationship with college entry, persistence, and completion rates. Further, basic needs insecurity is associated with poorer physical health, depressive symptoms, and higher perceived stress.⁴ Higher education continues to be a key pathway to breaking the cycle of poverty and increasing wealth mobility. In addition to higher wages and lower unemployment rates, college completion has become a key economic driver, creating a more civically engaged citizenry, and preparing American adults for the fastest-growing industries while promoting economic mobility and global competitiveness.

Evidence is beginning to demonstrate the impact that comprehensive and centralized approaches to basic needs support in college holds for college and career success. When colleges provide one-stop shops for students facing basic needs insecurity, and embed resources into already established college processes, the result is reduced stigma, higher student retention rates, and removed barriers so students can focus on their academic success. At Phoenix College, this has included embedding enrollment in state and federal benefits as part of the financial aid process and identifying Pell recipients for targeted marketing efforts for a food pantry, dress for success closet, and other basic needs support services. This practice has effectively reduced stigma for students and reduced the overall cost of a college education by making state and federal benefits one piece of a broader funding plan, alongside scholarships, grants, work-study opportunities, and loans.

At Phoenix College in Arizona, a holistic approach to providing housing for homeless students has included intrusive case management practices, connection to career development and workforce opportunities, and food and transportation resources. Targeting those students who are homeless or about to become unhoused, this program has provided long-term stable housing for our students so they can continue to complete their college degree, and increased income for program participants and their families. This program has effectively halved the cost that the state and federal safety net programs spend per individual who is homeless. Watch a short video on the H.O.P.E. program at PC here:

State and Federal Policy Recommendations to Address Basic Needs

Federal and state policymakers have an opportunity to increase the number of Americans completing college by increasing focus on students’ basic needs. Meeting students’ basic needs improves college completion, ensuring entry into the workforce and an ongoing skilled populace to meet the fastest-growing industries in the U.S. Currently, there are few federal, state, and institutional resources that specifically address basic needs challenges in a systemic way. Federal public benefit and safety net programs contain rules that frequently prevent college students from engaging them. Consider the following federal and state policy recommendations:

• Expand federal benefit programs (e.g., SNAP) for college students by allowing enrollment in higher education to satisfy all activity and participation requirements for income-eligible students
• Protect and expand grant funding for Basic Needs on college campuses by prioritizing funding for food pantries, transportation subsidies, emergency aid, and temporary housing
• Strengthen the Pell Grant program by expanding Pell Grant maximum awards to allow for basic needs support

As it currently stands, many federal benefit programs have complex eligibility exemptions that many students cannot meet while carrying a full-time academic schedule. SNAP Benefits, for instance, may require working 20 hours per week or participating in federal work-study, which is at odds with the data that demonstrate students enrolled full-time have higher graduation rates and more quickly contribute to the economy. The maximum Pell Grant covers less than one-quarter of the average cost of attendance for four-year state colleges and grants no extra funds to meet basic need insecurities. Further, the Pell grant has strict enrollment intensity thresholds, academic progress standards, and semester limits that prevent many students from receiving the assistance they need.

It is time to build a strong and competitive economy by addressing basic needs on college campuses and helping graduate students into the workforce. Expanding eligibility and streamlining state and federal benefits for students in institutions of higher education will demonstrate an investment in our economy and the industries that depend on an education beyond a high school diploma. This focus will ensure entry into the workforce for millions of adults within the U.S. and help the next economic engine enter the workforce and thrive.

Sources and Notes:

1. Cohen, J., Causey, J., Randolph, B., Holsapple, M., and Shapiro, D. (June 2025), Some College, No Credential Student Outcomes, Annual Progress Report — Academic Year 2023/24, Herndon, VA: National Student Clearinghouse Research Center.
2. Gallup and Lumina Foundation. (2024). Cost of college: The price tag of higher education and its effect on enrollment. https://www.luminafoundation.org/wp-content/uploads/2024/04/Cost.of_.College.pdf.
3. A stop-out is someone who temporarily withdraws from enrollment at a college or university for a period of time.
4. Hope Center for Student Basic Needs. (2025). The Hope Center 2023–2024 Student Basic Needs Survey Report. https://hope.temple.edu/research/hope-center-basic-needs-survey/2023-2024-student-basic-needs-survey-report
5. Carnevale, A. P., Smith, N., Van Der Werf, M., & Quinn, M. C. (2024). After everything: Projections of jobs, education, and training requirements through 2031, Georgetown University Center on Education and the Workforce. https://cew.georgetown.edu/cew-reports/projections2031/.
6. Gallup and Lumina Foundation. (2025). The state of higher education 2025. https://www.gallup.com/analytics/644939/state-of-higher-education.aspx
7. National Student Clearinghouse Research Center. (2024). Current term enrollment estimates: Spring 2024. National Student Clearinghouse. https://nscresearchcenter.org/current-term-enrollment-estimates/.