As the costs of attending college continue to rise, a growing number of Americans are questioning whether they can afford it and whether there is an adequate return on that investment. Some innovative states are stepping up to address this affordability crisis through creative financial aid policies—and more should follow suit.
As of 2023, the average cost of college has risen to over $27,000 per year at public institutions and nearly $59,000 per year at private institutions—figures far out of reach for many who dream of continuing their education beyond high school. Students are also increasingly wary of taking out loans to cover their costs of attendance, which can burden them with debt that persists long after they’ve left school. This is especially problematic when the degrees or credentials some students earn don’t lead to well-paying jobs.
Despite the valid concerns around affordability, the fact remains that higher education is, on the whole, worth it. The share of American jobs that will require some level of post-high school education or training is expected to reach 85 percent by 2031. This reality means that if we want our economy to have the well-prepared talent it needs to thrive, we cannot wait to address the cost and return on investment barriers that currently keep too many students from enrolling.
Addressing these challenges requires a twofold solution. First and foremost, higher education leaders need to ensure that the programs and degrees they offer are equipping students with the knowledge and skills they need to land good jobs and will therefore yield real economic value; in other words, to make sure college is worth the cost. At the same time, it is also essential that our elected leaders do more to put higher education within reach of more students.
Historically, the main approach to helping students access higher education has been via federal financial assistance in the form of grants and loans. Given its scale, federal aid will continue to be crucial; but there is simultaneously a major opportunity for leaders at the state level to use their own financial aid programs to expand access and success. And if they are designed with intention, state-developed aid programs can become an economic development investment as well, drawing more people into postsecondary training and degree programs that lead to well-paying, in-demand jobs.
Louisiana offers a great example of this type of state leadership. In 2021, the state legislature unanimously approved the establishment of the MJ Foster Promise Program, a state fund that is intended to boost participation in training programs aligned with Louisiana’s greatest areas of workforce need. The program provides up to $3,200 per year to students enrolled in programs that will equip them with credentials in growing industry sectors within the state, including construction, healthcare, information technology, manufacturing, and transportation and logistics. By targeting its financial aid in this way, Louisiana is using it as a lever to increase enrollment in programs likely to have the greatest return on investment for students and for the state.
Financial aid can also be a way to reach people who are over the age of 25 but might consider enrolling or re-enrolling in higher education to build new skills and improve their job prospects. When Michigan established an ambitious statewide attainment goal to increase the share of people with postsecondary degrees and credentials, the state soon realized that it would not meet its goal by focusing solely on the “traditional”-aged college population. During the pandemic, Michigan used federal relief funds to launch a program that offered free community college tuition to people who were working in essential industries but did not have a college degree. Over the next several years, that program expanded and evolved into what is now known as Michigan Reconnect, which offers tuition assistance at public community colleges to any Michiganders over age 21 who do not have a college degree. By removing the tuition barrier, the state can enable many more people to reskill or upskill in key industries and dramatically expand its talent pipeline.
Other states are developing policies that automate access to financial resources to bring more students into the fold—particularly those who have the most to gain from financial assistance. Thanks to recent legislation in Washington state, those who are eligible for the federal Supplemental Nutrition Assistance Program (SNAP) will automatically be granted need-based state financial aid to attend college beginning in the 2025-26 school year. Last year, Indiana lawmakers passed a new policy automatically enrolling income-eligible students in its highly-impactful 21st Century Scholars program, which provides scholarships that cover up to 100% of tuition at participating two- and four-year colleges in the state. These states and others with similar policies in place recognize that by proactively connecting students to financial aid, they can remove the red tape that often stands in the way and signal very clearly to students that they are, indeed, college material and can afford it.
The cost of college isn’t likely to go down anytime soon; but as these and other states have shown, the affordability challenge can be addressed through innovative financial aid policies that put higher education and training—especially programs that lead to good jobs—within reach of more people. States are uniquely positioned to lead here. They can move much more quickly and nimbly than the federal government and can develop programs that are specifically suited to their unique contexts.