Washington Watch: Role of Housing Costs on College Affordability

Washington Watch is produced and edited by the AACC office of government relations and policy analysis.

At the apex of Maslow’s hierarchy of needs sits self-actualization, met by attending to one’s self-fulfillment needs. Higher education is one approach to self-actualization. But to reach the apex, other needs must be first met. At the foundation of the five-level hierarchy are physiological needs, including food and water and warmth and rest (otherwise known as shelter or housing). Affordable housing therefore is not only important, it is fundamental to succeeding in college.

The housing factor for older students

Housing is the largest expense beyond tuition for older postsecondary students, according to a new report by the Georgetown Center on Poverty and Inequality and expected to rise in the future. It is not just a matter of affordability for a large share of older students, the report states, they are housing insecure. In turn, difficulty or inability to pay housing costs is also associated with other challenges including food security, transportation, and childcare. These challenges are even more pronounced for community college students, who are disproportionately older than their counterparts at four-year colleges. A recent survey conducted by the Hope Center found that 44 percent of responding community college students said they experienced housing insecurity during the past 12 months. A majority (54 percent) reported going hungry because they did not have enough money to buy food.

Measures of housing costs

Housing is an allowable expense in the total cost of attendance calculation. Institutions have some leeway in calculating these costs, but most follow the recommendations of the U.S. Department of Education’s Federal Student Aid Office to have separate measures for students living off campus with parents, on-campus, as well as independent students living on their own. Room and board constitute the largest expense in the budgets of in-state or in-district public institution students. Students attending public two-year institutions spend almost half (49 percent) of their budgets to pay for room and board.

The Georgetown report focuses on a sub-category of the independent group, older students between 25 and 45 years of age. The main data source is the Consumer Expenditure Survey, collected by the Census Bureau for BLS and supplemented by data from the U.S. Department of Education’s National Postsecondary Student Aid Study (NPSAS).

Pertaining to older students, the report found that: (1) the institution-reported costs beyond tuition for older students were $2,200 below student-reported costs; (2) rent or mortgage payments represent 75 percent of housing costs, with utilities, housing services and furnishings making up the remaining 25 percent; (3) older students are more likely to experience or be at risk of homelessness; (4) African American older students spend less on housing – more likely to rent – but also report the lowest income levels and the largest student loan debt than other student groups. 

Based on these findings, the report concludes that “to successfully complete their education, college students need a clear picture of their total costs of attendance, including their living costs. Underestimates of students’ living costs can interfere with their financial planning efforts and access to financial aid—and limit the ability of higher education administrators and policymakers to target support to students facing the greatest barriers.”

Assistance with housing costs

During normal times many experience housing insecurity. The ability to pay rent or mortgage became even more challenging as a result of the ensuing economic upheaval of the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed by Congress in late March, among other things, offers both direct and indirect assistance for housing. The act provides $12 billion in federal funds to help families with housing related issues, including homelessness. This funding was provided to the Department of Housing and Urban Development (HUD) to be distributed to the states for Emergency Solutions Grants, Community Development Block Grants, and Low Income Home Energy Assistance Program, a portion of which goes to help with temporary rental assistance.

The CARES Act is more generous to homeowners than renters. For homeowners with mortgages backed by the government (about 70 percent of mortgages) the act allows up to six months forbearance that can be renewed for an additional six months. Borrowers must contact their lenders to request this assistance, which does not require proof of hardship. Unfortunately, many families don’t realize they can request this assistance. The act also includes a 60-day moratorium on foreclosures and a 120-day moratorium on evictions and late fees for renters in properties that receive federal subsidies. President Trump signed an Executive Order on August 8 to extend the federal eviction moratorium.

More resources needed

Other Congressional actions have yet to be enacted. On May 15, the House passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act that includes $75 billion for a Homeowner Assistance Fund to provide homeowners with assistance to cover mortgage payments, property taxes, utility payments, or other resources to help them stay in their homes. The HEROES Act would provide additional funding to HUD, including $100 billion to provide emergency assistance to help low-income renters at risk of eviction, $11.5 billion for Emergency Solutions Grants to help the homeless or those at risk of homelessness, and $5 billion in Community Development Block Grant funds, including $4 billion to allow public housing agencies to help provide stable housing for low-income families.

In July, Senate Republicans introduced a stimulus bill, the Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act, which would, among other provisions, include $2.2 billion for tenant-based rental assistance and $1 billion to public housing.

While Congress is out on summer break, the American Association of Community Colleges continues to advocate for the enactment of “policies that allow severely financially disadvantaged community college students with unmet need to access programs providing food, housing, medical and other basic needs.”

For more information contact Jolanta (J.J.) Juszkiewicz at jjuszkiewicz@aacc.nche.edu or Laurie Quarles at lquarles@aacc.nche.edu.

About the Author

Jolanta Juszkiewicz and Laurie Quarles
Jolanta Juszkiewicz is director of policy analysis at the American Association of Community Colleges. Laurie Quarles is a legislative resource associate at AACC.