The Huge Racial Gap in Household Wealth Hinders the Ability of African-American Families to Pay for the Higher Education of Their Children

Severely restraining the ability of blacks to pay for college is the fact that, for the past 30 years, black family income has held steady at about 60 percent of median white family income. This large and unyielding gap is a huge barrier to blacks who seek education beyond high school.

A far more important statistic for measuring the ability to finance the cost of higher education is family wealth. Family assets 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. More important, these assets can be sold or borrowed against to provide funds for college expenses.

A new report issued by the U.S. Census Bureau shows that in 2002 the median net worth of non-Hispanic white households in the United States was $87,056. For black households, the median net worth was $5,446. Therefore, whites had nearly 16 times the net worth of blacks.

There are strong indications that the family wealth gap is widening. The data shows that between 2000 and 2002, the median net worth of whites increased slightly from $85,157 to $87,056. But during this same period, the median net worth of blacks decreased from $8,044 in 2000 to $5,446.

If we go back to 1993, we find that the average white family had a positive net worth of $45,740. The net worth of the average black family was only $4,418. Thus, over the decade from 1993 to 2002, the racial gap in household wealth expanded from a 10 to 1 advantage for whites to an edge of 16 to 1.