Education is supposed to pave the path to a better life with better jobs and higher-paying salaries. Many thought that if more African Americans attended and graduated from college, it would help to close the massive racial wealth gap.
But it turns out college education actually widened the wealth gap, according to a new report.
Since the end of slavery, Black families have never managed to catch up to their white counterparts in terms of wealth. A number of things held back wealth building, such as racist lending policies.
“Not only are Black families pretty far behind, they’ve fallen further and further behind for millennials,” said Ana Hernández Kent, a senior researcher at the Federal Reserve Bank of St. Louis’s Institute for Economic Equity. “It will be very difficult for these older Black millennials to build wealth.”
Households with Black college graduates in their 30s saw their median net worth drop over the past 30 years to less than one-tenth the net worth of their white peers, according to a Wall Street Journal analysis of Federal Reserve data. Skyrocketing student debt and sluggish income growth helped cause this widening gap.
More than 84 percent of households with college-educated Black people in their 30s have student debt, an increase from 35 percent three decades ago, according to the report. They owe a median of $44,000, up from less than $6,000. By comparison, 53 percent of white college-educated households in their 30s have debt. This rose from 27 percent three decades ago. The median amount increased from $8,000 to $35,000, Wall Street Journal reported.
Simultaneously, Black graduates’ household incomes saw slow growth, according to a Wall Street Journal analysis of census data. The median income for Black college-educated households in their 30s went up just 7 percent from the early 1990s to late 2010s to about $76,000. Whites saw their income increase 13 percent to about $114,000.
“College is a scam,” tweeted Tomas @TommybTom.
However, not everyone agreed on Twitter. “Going to university raised my paycheck from $45K/yr to $61K/yr just after graduation (2012) to $79K/yr now. And with two so-called ‘liberal arts’ degrees (ASc/BA Graphic Design). I’m going have to call bullshit on that one. Like any tool, college/university is what you make it,” ReWind @hd433 tweeted.
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