So IHEP created 10 theoretical “students” based on aggregate, national data, and it used the Lumina Foundation’s affordability benchmark to figure out what each of those students or their families could reasonably afford to pay for college. The benchmark says that a student (or her family, if she’s a dependent) should be able to save 10 percent of her discretionary income the 10 years before college and work 10 hours a week at minimum wage as a full-time student. Using Lumina’s definition, the savings and earnings should cover the whole cost of a four-year degree. (Next America receives funding from Lumina.)

After it came up with what each of those 10 students could afford to pay, IHEP worked with College Abacus to analyze the net price of more than 2,000 colleges. Then it compared the two findings. Net price is the cost of attendance minus the grant aid a student can expect. Colleges have to post a net-price calculator on their websites, but there hasn’t been a good way to compare affordability for individual students. Just looking at tuition isn’t enough. Books, housing, food, and other university fees factor into the cost of college, too. But adding all that up and looking only at the sticker price isn’t a good estimate, either, because two-thirds of first-year, full-time undergraduates get some form of grant aid (money that doesn’t need to be paid back) to offset that number.

Of the more than 2,000 colleges analyzed, IHEP found that almost half were affordable only for students from families making more than $160,000. That means that in addition to being able to afford 90 percent of colleges, half of those colleges are also essentially exclusively reserved for them. For-profit colleges were the least affordable schools, and public colleges were the most affordable. But even then, four-year public colleges that didn’t meet the students’ affordability thresholds were off by an average of $9,000.

(IHEP)

All of this means that low-income students are less likely than their wealthier peers to actually earn a degree, even if they have the same academic profiles. “This shows just how few options low-income students have on the table for them,” said Mamie Voight, IHEP’s vice president of policy research and one of the authors of the report.

The report offers several recommendations, including increasing the Pell grant and urging states to spend more on higher education. Pell grants are specifically for low-income students, but the cost of college has risen faster than the grants have increased, meaning that even with grant aid, low-income students still struggle the most to pay for college. And the report points out that even when the option to take out federal student loans is factored in, most students still struggle to find an affordable college.

For instance, without loans, the poorest dependent student IHEP considered could only reasonably afford 3 percent of the colleges the report analyzed. Factoring in loans, the situation is better, but the student would still only be able to afford about 20 percent of the colleges.