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Nontuition expenses--including housing, food, transportation, and miscellaneous expenses, in addition to books and supplies--constitute a significant financial burden for many students pursuing higher education, even if they receive grant aid to help them pay tuition and fees. Well-designed policy interventions at both the federal and state levels could effectively address the hardships some students face. A large increase in the maximum Pell grant to provide students additional funds for living expenses may seem like a straightforward solution, but that approach is not optimal. Doubling the maximum Pell grant would increase the aid most current full-time recipients receive by the same dollar amount, regardless of the size of their current Pell grant. In other words, it would double the grant for the lowest-income students, who currently receive the maximum, but would increase it by much larger proportions for those whose somewhat higher incomes qualify them for smaller grants. The program's cost would more than double. In this report, we propose alternative design options for a need-based basic living stipend. Awarding two Pell grants, with the second grant explicitly for nontuition expenses, would be less expensive and more targeted to the lowest-income students than doubling the maximum. Our preferred option would be a distinct need-based living stipend supplementing an increased Pell grant. The stipend would be standard, not based on individual cost of attendance, which is an inconsistent metric. The maximum stipend could be lower than the maximum Pell grant. The stipend would decline at a chosen rate as incomes increase. This approach would be most flexible and would be less expensive and better targeted than an increase in the maximum Pell grant that would give the same amount of funding to the lowest-income students. A federal matching program providing incentives to states to provide need-based living stipends would be a useful complement to this federal program and could tailor aid to local circumstances.

Discussions about college affordability often revolve around helping students pay their tuition and fees. But nontuition expenses, including food, housing, and other living expenses, make up a large portion of student budgets and contribute to increased student debt. These expenses can be a barrier to student enrollment and completion. Lack of information about the true full cost of attendance, stringent requirements to qualify for income support benefits, and limited grant aid make it hard for many students to access enough resources to cover their basic needs. In this report, we summarize our findings emerging from research and a convening we hosted on nontuition expenses. Currently, there is no standardized way to measure cost of attendance at institutions, making it difficult for students to compare nontuition costs across schools. Providing students personalized information about what their food, housing, and other living expenses may look like allows them to plan for the school year but is distinct from practical solutions for measuring student need for financial aid purposes. Doubling the Pell grant is a common suggestion when discussing the cost of education, and incorporating some level of basic living expenses, in addition to the costs of books and supplies, into estimates of adequate grant aid would be constructive. But increasing the Pell grant is insufficient, as using it explicitly to cover living expenses could lack political support and may lead to unintended consequences, such as tuition increases. Based on these findings, state and federal policymakers can do more to support students who cannot afford nontuition expenses through changes to federal, state, and institution-level policies. Both enabling students to have access to income support benefits and more generous grant aid are central to policy efforts for addressing financial barriers to student access and success. Increases in need-based financial aid from federal and state governments, as well as institutions, are important. But we should not view low-income students as entirely distinct from other low-income adults, and education policy alone cannot be responsible for meeting students' basic needs.