A report out this week questions conventional wisdom and suggests that a college degree does not act as a safeguard for wealth equally for all racial groups.
The office of Household Financial Stability of the Federal Reserve Bank of St. Louis released the study, which shows that between 2007 and 2013 — during the worst years of the recession — the medium net worth for African Americans with college degrees declined by 60 percent. Hispanics saw a 72 percent drop in wealth. The decline in net worth for whites, however, was only 16 percent, and Asian Americans actually saw an increase.
Furthermore, the study’s authors found that this disparity was consistent going back two decades. They say job market difficulties — such as discrimination and career choices — and having assets concentrated in housing disproportionately affected African Americans and Hispanics.
The authors caution that their study does not suggest that a college degree is invaluable, however.
“Hispanic and black college-graduate families still make multiples — or they still have wealth that are multiples — of non-college families, so the message is not that college is wrong,” study co-author William Emmons told NPR.
The study concludes, though, that a college degree alone is not enough to provide short-term wealth protection, nor do they guarantee long-term wealth accumulation, particularly for minorities.
