Despite Low Tuition and Grant Aid, Most Community College Students Have Unmet Financial Need

New data from the U.S. Department of Education highlight community college students’ financial aid, unmet need, and borrowing.

Community colleges are well known for their comparatively low tuition; however, according to data from the U.S. Department of Education, over half of community college students receive financial aid. For many low-income students, a full or partial federal Pell Grant is enough to cover the cost of community college tuition: $3,500 on average. However, beyond the price of tuition, many community college students face other large expenses, such as housing and other living expenses, which make up the bulk of their full cost of attendance.

This article presents analysis of recently released data from the 2016 National Postsecondary Student Aid Study (NPSAS), by the U.S. Department of Education, to take closer look at community college affordability and two main sources of financial aid: Pell Grants and federal student loans. This article also presents data on key community college student groups by race and ethnicity, first-generation students,[1] and independent students. For more analysis of the 2016 NPSAS data, read ACCT’s previous article on community college student demographics.[2]

1. In 2016, about one-third of community college students received a federal Pell Grant. Among recipients, the average award was about $3,300—only a few hundred dollars less than the average price of tuition and fees. Looking closer at recipients, students who identified as Black or African American and those who identified as first-generation were more likely to receive Pell Grants than their peers.

Source: Author's analysis of NPSAS:16

2. Community colleges offer students a low tuition, especially after grant aid (net price). However, the net price of tuition, fees, and living expenses may still comprise a significant portion of their income. While less than other higher education sectors, the net price of tuition, fees, and living expenses in 2016 still equaled 37% of students’ income, on average. The burden was especially high for independent students, for whom the net price equaled 44% of their income on average, and for Black or African American students, for whom the net price equaled 43% of their income. 

Source: Author's analysis of NPSAS:16

3. In 2016, nearly three-quarters of community college students faced unmet financial need to cover their full cost of tuition, fees, and living expenses.[3] In 2016, on average, students had about $7,000 in unmet need after accounting for their expected family contribution and grant aid. The prevalence of unmet need is high among all student groups examined here, likely reflecting high living expenses for many community college students.

Source: Author's analysis of NPSAS:16

4. A relatively small share, 13%, of community college students took out federal loans to pay for college expenses not covered by personal or family contributions and grant aid. Among borrowers in 2016, the average loan amount was approximately $5,000. However, there are large differences in the rate of borrowing between different student groups. For example, 22% of community college students who identified as Black or African American took out a federal loan in 2016, compared to only 6% of students who identified as Hispanic or Latino. Furthermore, students’ decisions to borrow may not be solely correlated to their unmet need (see chart above); rather, they may also be shaped by students’ comfortability with and attitudes towards taking on debt.

Source: Author's analysis of NPSAS:16

The new NPSAS data highlight how important financial aid is for community college students and their success. Currently, even with grant aid, many students are left with burdensome unmet need, especially to pay for their living expenses beyond tuition. Grant aid is especially important for loan averse community college students, who when faced with financial challenges, may choose to work additional hours or attend classes part-time—ultimately creating barriers to college persistence and graduation. Furthermore, the data reveal that these challenges are especially salient for minority, first-generation, and independent student, underscoring the need to make equity a central tenant in college affordability efforts.

Allison Beer is the Senior Policy Analyst for ACCT. She can be reached at

[1] For this analysis, first-generation students are defined as those whose parents have not completed any postsecondary education or training beyond high school.

[2] All calculations based on author’s analysis of the U.S. Department of Education, National Center for Education Statistics, 2015-16 National Postsecondary Student Aid Study (NPSAS:16). For more information about specific survey variables and methods, contact the author at

[3] For this analysis, unmet financial need is defined as a student’s budget minus their expected family contribution and federal, state, and other grant aid.

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