Is a college degree still worth the ever-increasing cost of tuition? Will it really help you climb the socio-economic ladder in America? And once you’ve climbed it, will you be able to remain there? Those are legitimate questions in light of a study released this week analyzing wealth data over two decades.
While the study argues that a college degree is the surest way to increase your earning potential over time and compete for well-paying jobs in today’s economy, there is a caveat.
If you happen to be black or Latino, the report warns that higher education alone will not insulate you and your family from short-term economic downturns or adverse long-term income trends as it apparently has for other racial and ethnic groups.
Minorities suffer more during rough economic periods
The Center for Household Financial Stability study, “Why Didn’t Higher Education Protect Hispanic and Black Wealth?” found that median incomes for all American families headed by someone with a college degree was 2.4 times the median income of families headed by someone without a degree. Similarly, families headed by college graduates achieved greater net worth compared to non-college graduates -- $273,586 versus $43,635 based on 2013 figures.
Focusing on a six-year span (2007- 2013) that included the Great Recession and its aftermath, the report found that the median wealth of all families headed by a college graduate declined by 24 percent. For families without a college degree, their accumulated wealth declined by nearly 50 percent.
While white and Asian college-headed families weathered this period of financial turbulence much better than their less-educated counterparts, it was quite a different story for blacks and Latinos. Indeed, median wealth for Latino college-grad families declined by a staggering 72 percent compared to 41 percent for non-college grad Latino families. Black families did not fare much better, with declines of 60 percent for college-headed families versus 37 percent for those without a degree.
The underlying causes behind the disparities in wealth and income presented in the report, as the authors point out, are longstanding and complex. Even so, some of the factors contributing to the ethnic wealth gap are well-documented.
For instance, irrespective of their level of educational attainment blacks and Latinos were twice as likely to be impacted by the housing crisis as whites. And while predatory lenders primarily hawked their subprime loans to less savvy borrowers, many college-educated black and Latino families were not immune to discriminatory lending practices that saddled them with high-priced home mortgages. When the housing market collapsed, a disproportionate number of blacks and Latinos lost their homes to foreclosure or found themselves steeped in debt.
It’s also true that blacks and Latinos tend to earn less than whites, experience higher rates of unemployment and hold fewer advanced or professional degrees in specialized fields. And despite great strides diversifying the workforce, racial discrimination continues to play a role in hiring decisions. To be sure, racism is still alive and well in our society. The harsh political debate surrounding immigration policy is incontrovertible evidence of that. And frankly, no amount of degrees, wealth or credentials will change that reality.
Supporting College Success
Still, there is value in this study, especially if it spurs a closer examination of our educational priorities and how we support the college success of our high school graduates. Are we doing enough to track college applications, enrollment, financial aid and in-college progress? Are we providing adequate resources to our high schools, particularly those in poorer neighborhoods to support coursework and advanced fields of study that are in demand by colleges?
The sad truth is too many black and Latino students are steered into soft subject areas, such as sociology, political science and the humanities, instead of being encouraged to pursue specialized fields, such as engineering, bio-tech and computer science where the economic rewards are greater and the demand from employers strong.
After all, is there really equity in the education system when only 12 percent of the student population in the city’s elite high schools are black and Latino?
A college education is not a guarantee of high earnings or wealth. But it still offers the best opportunity for minorities to advance and compete for well-paying jobs on their way to securing their piece of the American Dream. We should be encouraging our students to aim high, while also taking steps to help them avoid amassing large sums of debt in pursuit of their degree.
Student loan debt is emerging as an issue in the 2016 presidential campaign. Democratic candidate Hillary Clinton recently proposed replacing student loans with government grants. A national discussion is sorely needed, because ignoring this issue will serve only to widen the racial economic gap, rather than narrow it.