To add to u/RewriteCinema's answer, the literacy rate is hard to determine. If you know a handful of words, you may be capable of base level communication or public vandalism (graffiti). In addition, the verbal graffiti in Pompeii, the most common site used to justify higher literacy rates, had mostly political topics. With the patronage system of the Romans, the lower classes were mostly excluded from politics. Even with this though, Pompeii was not a backwater town, and likely had higher literacy rates than many other towns outside of Italy proper such as the Gallic provinces.

Bringing up literacy once again, Literacy is tricky to define. We have in Petronius’ Satyricon a reference to stone-letters suggesting a rudimentary form of reading akin to sign reading. This may have been more prevalent but is far from the Virgil and Cicero reading elite class. True literacy would require extensive education as it does now especially since a general dearth of access to books existed in the ancient world for most people.

The rich of course had tutors that taught Latin, Greek, and the art of rhetoric. There is some evidence that even those of a slightly lower social standing had some access to simple schooling. In Epigrams Martial, the poet, complains about the schoolmasters in the morning. Still, since the schoolmasters would need to be paid, this would have to be far from anything like the public education of today.

If one defines literacy stringently, William Harris is probably right with the ten percent estimate. However, if one lowers the bar to reading signs, monuments, temple dedications, etc. the number was surely higher.

Not to discourage further discussion but u/Astrogator wrote an excellent response to a similar question. Literacy in the ancient world was more in shades of grey than our modern ideas of literate/illiterate