The wealth gap between black and white families has been huge. Typically, over the past generation white families have had wealth that was 10 times that of black families.
Components of family wealth, such as stocks, bonds, money in the bank, and real estate, produce interest, dividends, or rental income which are commonly used to offset or pay college costs. Wealth also includes the value of a family’s home. This important asset can be sold or borrowed against to provide funds for college expenses.
The Federal Reserve Board recently released its Survey of Consumer Finances for 2010. The data showed that the recession struck most American families very hard. Median incomes declined by nearly 8 percent from 2007 to 2010. But the real shocking blow was that median net worth of American families dropped considerably.
White families saw their median net worth drop from $179,400 in 2007 to $130,600 in 2010. This is a decline of 27.2 percent. For nonwhite and Hispanic families, their median net worth dropped from $29,700 to $20,400. This is a decline of 31.3 percent.
With sharp rises in tuition at many state-operated colleges and universities, the growing racial wealth gap will undoubtedly result in the inability of many Black students to afford a college education.