Blacks Are At an Extreme Disadvantage Compared to Whites in Their Ability to Use Home Equity to Finance Higher Education

Home equity has become a major factor in financing higher education in the United States. Tax-deductible home equity loans are often used by middle- and upper-middle-class families to help pay for the cost of higher education.

But here African Americans are at a major disadvantage. New statistics from the U.S. Census Bureau show that not only are blacks far less likely than whites to own their home, but when they do own a home, the value of the home is only a fraction of the average value of homes owned by whites.

According to the data, nearly 74 percent of whites owned their home in 2004 compared to 46.4 percent of blacks. For those who did own a home, the median value of white residences was $153,693. For blacks, the median home value was $105,532.

These figures do not tell us how much equity blacks and whites have in their homes that they can use to help finance their children’s education, but the data shows that clearly blacks are at an extreme disadvantage in this important facet of American wealth.