Brief A Closer Look at College Affordability: The Link between Living Allowances and Student Debt
CJ Libassi, Zachary Mabel
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Nontuition expenses—such as housing, food, transportation, and books—are a major component of the total cost of attendance at many colleges, but policymakers concerned with college affordability often focus only on curbing tuition prices. Living allowances, the largest component of nontuition expenses at most institutions, can drive large differences in real or perceived affordability across colleges. This can affect where students enroll, their prospects of completing college, and their financial return on investment. Understanding whether institutions use discretion when setting nontuition costs—and if so, whether this has consequences for how students pay for college—could inform new strategies for curbing nontuition expenses and making college more affordable.

Key Data

  • College living allowances vary widely, even within the same geographic areas. The difference between the 25th and 75th percentiles of the living allowance distribution across colleges exceeds $5,000 in many metropolitan areas, demonstrating that institutional discretion plays an important role in setting nontuition expenses.
  • First-year students borrow more, on average, at colleges that set higher living allowances, even after accounting for factors that influence the living allowances each college sets and the financial aid they award.
  • Average living allowances tend to be lower at less selective institutions, which may limit the borrowing capacity of low-income students more than that of high-income students.


Comparing how much institutions cost is often an important factor in the college decisionmaking process, and institutional discretion over setting living allowances can cause students and families unnecessary confusion. Policymakers should consider implementing some degree of living allowance standardization across colleges, such as regulating how colleges adjust for differences in local living costs. This would likely help students and their families when deciding whether and where to enroll.

Additionally, because living allowances are a major component of the total cost of attending college, they are an important factor in determining how much students can borrow in federal student loans. By more closely aligning student loan borrowing to the real cost of college attendance, standardizing how colleges set living allowances could also help address concerns that students are borrowing too much (or too little) to finance their postsecondary educations.

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Additional Resources

Research Areas Education
Tags Higher education Paying for college
Policy Centers Center on Education Data and Policy