The Wealth Gap

The Wealth Gap

How The Education World Fails To Fully Measure Students’ Economic Disadvantage

By: Matt Barnum, Chalkbeat 

When Ajuah Helton was a college student, her financial aid package came up a few thousand dollars short. What happened next threw her off course.

Her mom took out a high-interest federal loan that she ultimately couldn’t repay. The next year, her mom wanted to avoid more loans, but didn’t have other funds to tap into. Helton, out of options, left school for a semester to work to make up the difference. 

“That’s with a mom who was fully employed, college-educated, but did not come from anything that allowed her to say, ‘Oh $5,000? Let me just go to my bank account or my stock market and pull out a little bit of cash,’” Helton says.

Helton, who is Black, did graduate. She is now the national director of KIPP Through College, a program designed to help students like herself earn college diplomas. But every day, she sees her own story reflected back at her — the absence of family wealth shaping the trajectories of students, particularly Black students. 

“That legacy plays out in any number of ways, starting with what a family has access to to pay for education,” said Helton. “Often, there is no mortgage to take out of a home. There is no long-term savings.”

America’s racial wealth gap is massive. The median Black household with children has a net worth of $300, compared to $47,250 for the median white family. Those Black families have 1%, and Hispanic families have 8%, of the average white family’s wealth. 

The education world often ignores wealth, though, focusing instead on family income, where racial disparities are smaller. It’s ingrained in how we study efforts to help students at an economic disadvantage and talk about them, too: How are low-income students faring compared to their more affluent peers?

But a small body of new research suggests that wealth matters in a distinct way — and ignoring it means we may be underestimating the extra support that low-wealth students and schools need. [...]

America’s racial wealth gap among families with children

Why wealth matters for families and for children

[...] Wealth also shapes educational opportunity. It can affect where a family lives, and therefore where children attend elementary, middle, and high school, as well as college. It can influence, too, whether those children experience material hardship and the degree of stress in their household, which can affect their ability to focus on school.

The recent study by University of California Berkeley economist Rucker Johnson, the Berkeley researcher, goes a step further, suggesting that wealth is not just connected to academic success, but a cause of it. 

He found that when a family’s housing value spiked by about $50,000 in the years leading up to college, their child’s chances of finishing college increased by 3 to 4 percentage points. That may be because students from wealthier families are more likely to attend selective and well-resourced schools that increase their chances of graduating. 

“Does parental income matter? Yes,” Johnson said. “But parental wealth and parental income in combination matter much more.”

Liz Valladares, a recent high school graduate who went to a KIPP SoCal middle school, is experiencing those effects firsthand. When COVID-19 hit, her mom’s work hours were cut. Without another financial cushion, she had to tap into a college fund she had started a few years earlier. The added financial strain means Valladares is attending her local community college in Los Angeles rather than the university she’d planned for. 

“It was hard for me,” said Valladares. “But as a parent it was harder for her to tell her own kid, ‘We can’t really afford that, you’re going to have to change your dream.’”

Valladares says school is going well so far — with the help of money from KIPP SoCal to pay for a laptop and books — and she hopes to transfer in a couple of years. But many students lack such support, and research shows students are far more likely to drop out if they attend a two-year rather than a four-year college.

What should we do about it?

[...] Of course, school officials don’t control economic policy. But they can decide how to respond to students’ economic circumstances. If our shared understanding of economic disadvantage is flawed or incomplete, students who stand to benefit from additional help are going without it.

Read the full story, here

Chalkbeat is a nonprofit news site covering educational change in public schools.

About the Author:  Matt Barnum is Chalkbeat’s national reporter, covering education policy and research. Previously he was a staff writer at The 74, the policy director for Educators for Excellence – New York, and a middle school language arts teacher in Colorado.