Typically, over the past generation White families have had wealth that was 10 times that of Black families. Components of family wealth, such as stocks, bonds, money in the bank, and real estate, produce interest, dividends, or rental income which are commonly used to offset or pay college costs. Wealth also includes the value of a family’s home. This important asset can be sold or borrowed against to provide funds for college expenses.
A new study by the Pew Research Center shows that since the Great Recession, which began in December 2007, the racial wealth gap has grown wider. In an analysis of data from the Survey of Consumer Finances of the Federal Reserve, the Pew Research Center found that in 2007, White families had an average net worth of $192,500. This was 10 times the average net worth of Black families in 2007, which stood at $19,200.
Since that time the average net worth for both Black and White families has declined but the declines, on a percentage basis, have been more drastic for Black families. In 2013, the average net worth of White families stood at $141,900. This was 13 times greater than the average net worth of Black families, which stood at $11,000.