A college degree does not protect the wealth of all racial and ethnic groups equally, a recent St. Louis Federal Reserve Bank research report found.
The study was based on the data from the 2013 Survey of Consumer Finances report.
The study reported families with a college graduate as its primary financial supporter earn 2.4 times more than families without a college graduate. It also found during bad economic situations, for example the recent recession, higher education protects only a select group of people, particularly whites and Asians, while Hispanics and blacks fared worse.
Interestingly, black and Hispanic families headed by non-college graduates did better than their counterparts with a college degree.
“Median wealth declined by about 72 percent among Hispanic college-graduate families versus a decline of only 41 percent among Hispanic families without a college degree. Among blacks, the declines were 60 percent versus 37 percent,” the report said.
In an attempt to explain why, researchers suggested job market difficulties specific to Hispanic and black college graduates.
Another contributing factor was the debt-to-income ratio. DTI among college-educated Hispanic and black families were significantly higher than whites and Asians with a college education.
Andres Berruecos, senior at Queens College, was not confident his college degree could protect him from economic shock. Thus, he saw the need to further his education.
“I plan on going to graduate school and I will probably take out student loans in order to fund my tuition,” Berruecos said.
He believes the majority of Hispanics and blacks get jobs that place them in the “lower middle class,” which makes it more difficult to, for example, pay back student loans.
In order to get through college without accumulating loans, Berruecos worked 50 hours a week between two jobs for the past year.
Nakia Inis, a senior at Queens College equally shares her concern on future job prospects even after graduating.
“My college degree unfortunately does not secure a job nor financial stability,” Inis said. “A lot of people get jobs due to who they know or who their parents know, which makes it harder for minorities.”
The study concluded higher education cannot “level the playing field.” Rather, “the underlying factors causing racial and ethnic wealth disparities undoubtedly are complex and deeply rooted.”
Berruecos agrees the causes are ingrained and one solution may be to address it to youths at an early age.
“The idea of equality and diversity has to be deeply rooted in someone from the time they’re an early toddler,” Berruecos said.