If that's true, then what explains the massive and continual wealth gap for black and Hispanic folks who do graduate college and still make far less money?
From 1992 to 2013, the median net worth of blacks who finished college dropped nearly 56 percent (adjusted for inflation). By comparison, the median net worth of whites with college degrees rose about 86 percent over the same period, which included three recessions — including the severe downturn of 2007 through 2009, with its devastating effect on home prices in many parts of the country. Asian graduates did even better, gaining nearly 90 percent.
This statistic actually makes me physically ill. It's gut-wrenching.
To understand just how disappointing these results are, look at the impact during this period on comparable groups without college degrees. Blacks without degrees, in large part because they had much less to lose, experienced a 3.8 percent drop in wealth. Whites who didn’t graduate from college lost nearly 11 percent. The wealth of Asian nongrads fell more than 44 percent.
There is not a simple answer to explain why a college degree has failed to help safeguard the assets of many minority families. Persistent discrimination and the types of training and jobs minorities get have played a role. Another central factor is the heavy debt many blacks and Hispanics accumulate to achieve middle-class status.
The collapse of the housing bubble played havoc with college-educated black and Hispanic families, who on average accumulated a huge amount of debt relative to the size of their paychecks. They borrowed a lot to buy homes, only to see them plunge in value during the mortgage crisis. While the average value of a home owned by a white college graduate declined 25 percent, homes owned by black and Hispanic grads fell by about twice that.
This loss was made more devastating by the fact that blacks and Hispanics tended to have more of their wealth concentrated in their homes than whites and Asians, who, on average, accumulated more assets in the stock and bond markets, primarily through retirement accounts.
The housing boom and bust particularly whipsawed college-educated Hispanics: From 2007 to 2013, their net worth fell a whopping 72 percent.
One lesson, according to economists at the St. Louis Fed, is that borrowing too much to get a piece of the American dream often undermines any hope of sustaining it.
This is why college affordability should be of primary importance to black and Hispanic families, and why I'm very glad to see such plans come from Democratic candidates.
It also explains very much why Republicans want to slash university funding and refuse to do anything about student loan debt. If you have to literally mortgage a home in order to afford college, in the long run you're breaking even at best.
This is why Republicans want to limit college to those who already have the wealth to be able to afford it.