College Degrees are No Equalizer
Yesterday, I came across an article with a headline that shocked many, but didn’t surprise me at all. The research from the Federal Reserve Bank of St. Louis states that college degrees failed to lead to wealth creation for black and Latino graduates. The report can be found here: https://www.stlouisfed.org/publications/in-the-balance/issue12-2015/why-didnt-higher-education-protect-hispanic-and-black-wealth
An interesting point from the article is that degrees have been associated with helping families “protect” their wealth rather than “create” it. Also, from 1992 to 2013, which included three recessions, the median net worth of black students who finished college dropped nearly 56 percent compared to an 86 percent and nearly 90 percent increase in the median net worth of whites and Asians with college degrees respectively. Policy changes can also influence the ability for certain individuals to create wealth. Read more on that here: http://www.demos.org/publication/racial-wealth-gap-why-policy-matters
So what is someone to get out of all of this information? Why does it matter? I’m no economist, but what I do know is that the cost of access to a “quality” education is part of the problem. If education is supposed to be the “great equalizer” in America, access to education should not boil down to whether one can afford it. Unfortunately, in most American educational spaces, the best education available goes to whoever has the funds.
What are we to do? Should we follow in the footsteps of Stanford, and waive the tuition for any family making less than 125K/year? (While also only accepting 5% of applicants) Or should we continue to let things go the way they are? I’m not sure. I know that if people want to create wealth, they should have a plan.
I know that my undergrad degree is collecting dust in a sock drawer. I know that college degrees do not guarantee anything at all. There are very few things in life that are guaranteed (death and taxes are two). One guarantee, according to Forbes, is that college degrees are worth 830K more than a high school diploma. So no, college degrees are certainly no equalizer, but they just might be worth it.. in the long run.
Sometimes when I reflect on the 70–80K I paid for my undergraduate degree, I wonder if I was ripped off or was I simply not well informed about my options. Perhaps both. In the future I plan to make sure families and potential college students understand what they are getting into when they make a college education a part of their plan. I also want to make it easier for people to access a quality college education, especially people who don’t have hundreds of thousands of dollars to spend, those who won’t be in a position to repay their loans, and the families without connections in the best educational circles.
Equal access to education doesn’t turn out to create equal opportunity once the education is received. This is something I plan on tackling over the next few years. If people are being crushed by the cost of their education and face bleak job market prospects once they graduate, how will they ever generate wealth for themselves and their families? As the study mentioned, college degrees help families protect their wealth not create it. This means that a degree does more good in a home that Is already doing well in the financial wealth department compared to a home that is not.
My question for people is, “how can we get education, (at any level but especially college) to truly become the great equalizer?” I wonder if it’s possible. If education isn’t going to help create wealth then what is?
Originally published at kevinclaiborne.com.