I don’t know where you live- but there are many states where the problem isn’t the donut hole families- it’s the actual “middle middle class” (i.e. median wage families which is usually below the donut hole) and the lower middle class. These are ALSO people who have dutifully paid their state taxes and to discover when your kid is in HS that your own state flagship is just off the table is a very rough awakening.
Ask families in Pennsylvania for example.
These are not families being penalized because of their zip code (they live in middle class towns, after all- and frequently they’ve been paying outsized property taxes to support the local public K-12 school system.) They are “penalized” if you want to call it that because state legislatures have discovered that under-funding the university system is a neat way to get to a balanced budget. So tuitions go up. The U’s discover that admitting kids from out of state with an “out of state penalty” is a nice way to enhance the revenue stream (who do you think those more affluent out of state kids have knocked out of their dorm rooms? )
I think we’re both concerned about the same phenomenon- but looking at it from different ends. I know many donut hole families- their kids DO go to college. Maybe not choices numbers 1-5, but they get to college. Two income rungs below that and it becomes a question. If there’s no commutable state directional? Then the question is often no. The costs of room and board quickly make that “kinda sorta” affordable college completely out of the question.