The report, released by the California-based National Center for Public Policy and Higher Education, states that although North Carolina has improved at preparing students for college, state officials aren't making enough effort to sustain affordability.
The state's affordability grade dropped to a "C" from the "A" it received two years ago, when the report was first published.
Will Doyle, senior policy analyst for the center, said higher education systems are graded on their benefit to the state.
All states were compared to the highest-ranking state in a particular category. California was deemed most affordable this year.
Doyle said the poorest families in that state pay only 3 percent of the cost of higher education. The average cost of full-time enrollment at California community colleges is $390, he said.
But UNC-system President Molly Broad said California was ahead of all states in affordability because its General Assembly "passed a mammoth expansion in need-based programs."
"It was so substantial that the gap between California and other schools was greater," she said. "California was the only school to get an 'A,' and I think only three states got a 'B.'"
Broad said that although she did not take issue with the report's methodology, she hoped students would not hesitate to apply to a university that is "just as affordable now as it was two years ago when it received an 'A.'"
"If one student decides not to apply to the University of North Carolina because of this report, it would be a tragedy."