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The cost of college is increasing sharply, and low-income students have been hit hardest. In the past decade, average public four-year college tuition rose 51 percent, after adjusting for inflation. When fees such as room and board are added in, the increase approaches 50 percent. The Advisory Committee on Student Financial Assistance studied the effect these increases have on low-income students and found that more than 400,000 college-qualified students were unable to attend a four-year school in 2002 because they couldn’t afford it.

"Most Americans believe that all students have the opportunity to earn a college degree through hard work in high school and college. Yet, this year alone due to record-high financial barriers, nearly one-half of all college-qualified, low- and moderate-income high school graduates — over 400,000 students fully prepared to attend a four-year college — will be unable to do so, and 170,000 of these students will attend no college at all. Over this decade, 4.4 million of these high school graduates will not attend four-year colleges and 2 million will attend no college at all. For these students, the promise of a college education is an empty one. For the nation, the loss of human capital will exact a serious economic and social toll for much of this century." (Empty Promises (PDF), Advisory Committee on Student Financial Assistance, June 2002)

Government-funded grant programs aren't keeping pace with increasing college costs for low-income students. College costs continue to rise. The 2003-2004 survey of tuition and fees by The College Board shows increases of about 14 percent at four-year and two-year public institutions and 6 percent at private institutions. Read the full report (PDF).

The buying power of the federal Pell grant has dropped sharply as college costs have increased, reducing college access for lower-income students. According to The College Board's Trends in Student Aid 2004 (PDF), the average Pell Grant of $2,466 covered about 23 percent of average total charges (tuition, fees, room and board) at four-year public institutions. As recently as 1986, the average Pell Grant covered 98 percent of tuition at a public four-year school.

The combined effect of these trends has been to decrease postsecondary opportunity for lower-income students. The National Report Card on Higher Education lowered America's "grade on college affordability" to an "F" in its most recent Measuring Up.

Lumina Foundation for Education has launched an initiative aimed at developing solutions for the rising cost of college. In August 2004, the Foundation released Collision Course: Rising college costs threaten America's future (PDF) and issued a call for solutions inviting administrators, policy makers and others to offer cost-effective solutions.

Distributing resources more efficiently and effectively can promote expanded, equal access to postsecondary education. The Foundation is supporting an initiative to examine how financial aid, financial policies and practices on the federal, state and institutional levels should be structured to maximize access and success for all students. Lumina Foundation's research report, "Expanding College Access: The Impact of State Finance Strategies,"  examines the effect of state finance strategies for higher education on college enrollment. The report calls for states to increase funding for need-based grants to maintain financial access for low-income students.