The Complicated Relationship Between Black Wealth and Education

For Black Americans, the prospect of student debt forgiveness, currently under consideration by President Joe Biden, would be especially welcome.

As the cost of college has skyrocketed, student debt burdens have, too, with minorities carrying the brunt of those financial obligations. Black students are more likely to take on debt to pay for school, studies have found, and they’re also likely to have higher debt burdens, compared to White graduates who take out loans.

Black college students owe, on average, $7,400 more than their White peers on graduation day, 2016 research by the Brookings Institution found. Four years later, those same Black students owe almost $25,000 more than White students, due to differences in repayment and default rates.

But here’s the conundrum: Even taking student debt into account, more education predicts higher income and wealth. For full-time, year-round workers in their mid-20s and 30s, having at least a bachelor’s degree is worth an additional $23,000 a year in income, according to U.S. Census Bureau data.

In episode 5 of The Pay Check, we look at how closing the education gap was one of the first major attempts to create more economic opportunity for Black Americans, and why that movement has largely failed to close the racial wealth gap in the U.S.

Affirmative action measures, first put forward by President Lyndon Johnson, set aside government contracts for minority-owned business. They also radically changed the racial makeup of schools, by allowing schools to weigh race in admissions. But even as the pace of Black Americans attending college has risen to 36% from less than 1% 80 years ago, the wealth gap has stubbornly persisted.