The racial wealth gap, financial aid, and college access
Bibliographic Data
| ID | 11680993 |
|---|---|
| Authors | Phillip B Levine (0000-0001-7374-3823, Department of Economics Wellesley College Wellesley Massachusetts USA, corresponding author), Dubravka Ritter (Federal Reserve Bank of Philadelphia Consumer Finance Institute Philadelphia Pennsylvania USA) |
| Year | 2023 |
| Volume | 43 |
| Issue | 2 |
| Pages | 555-581 |
| Publication date | 2023-11-02 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Policy Analysis and Management (JOURNAL) |
| Journal identifiers | ISSN: 0276-8739 • E-ISSN: 1520-6688 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1002/pam.22550 |
| OpenAlex | W4388301391 |
| Language | EN |
| Citations received | 4 |
| References cited | 35 |
We examine how the racial wealth gap interacts with financial aid in American higher education to generate a disparate impact on college access and outcomes. Retirement savings and home equity are excluded from the formula used to estimate the amount a family can afford to pay. All else equal, omitting those assets mechanically increases the financial aid available to families that hold them. White families are more likely to own those assets and in larger amounts. We document this issue and explore its relationship with observed differences in college attendance, types of institutions attended, degrees attained, and education debt using data from the Survey of Consumer Finances (SCF), the National Postsecondary Student Aid Study (NPSAS), and the Panel Study of Income Dynamics (PSID). We show that this treatment of assets provides an implicit subsidy worth thousands of dollars annually to students from families with above‐median incomes. White students receive larger subsidies relative to Black students and Hispanic students with similar family incomes, and this gap in subsidies is associated with disadvantages in educational advancement and student loan levels. It may explain 10 percent to 15 percent of white students’ advantage in these outcomes relative to Black students and Hispanic students
Actuarial science · Attendance · Business · Debt · Demographic economics · Economic growth · Economics · Equity (law · Family income · Home equity · Loan · Panel Study of Income Dynamics · Political science · Student debt · Student loan · Subsidy · Financial Literacy, Pension, Retirement Analysis · Higher Education Research Studies · Intergenerational and Educational Inequality Studies · Finance
Patterns of student departure and transfer behavior
The Long-Term Impacts of Child Development Accounts on Parental Educational Expectations and College Preparation
Do Black Elites Disproportionately Capture and Transmit to Offspring the Benefits of Policies Designed to Mitigate Overall Black Inequality
The consistency of the second classroom participation intention and behaviour of college students with financial difficulties
Disparities in Wealth by Race and Ethnicity in the 2019 Survey of Consumer Finances
Closing the Gap
The Effect of Liquid Housing Wealth on College Enrollment
The Effects of School Spending on Educational and Economic Outcomes
Income Segregation and Intergenerational Mobility Across Colleges in the United States
House price growth when children are teenagers
The Segregation of Opportunity
Assessing the College Financial Aid Work Penalty
The Racial College Completion Gap
Is College Financial Aid Equitable and Efficient
Growing Income Inequality in the United States and Other Advanced Economies
| Unique citing works | 4 |
|---|---|
| Citations per year | 4 |
| Citation span | 2025 - 2026 (2) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 4 |