A new study by researchers at the Federal Reserve Bank of St. Louis finds that the benefits of a college education as it relates to wealth are far less than has been the case in the past. This is particularly true for African American college graduates, many of whom have their wealth sapped by the burden of having to pay off student loans.
Make no mistake: People of all races who are college educated earn more and generate more wealth than their peers who did not go to college. However, over time, this advantage has shrunk dramatically, particularly for African Americans.
The study found that White college graduates born in the 1930s were worth 247 percent more than their non-college-educated peers. But White people born in the 1980s were worth just 42 percent more. For Black families where the head of household was a college graduate in the 1930s, their wealth exceeded their non-college-educated peers by 500 percent. For Black families born in the 1970s and 1980s, the wealth premium for college graduates compared to their non-college-educated peers did not exist.
The full study, “Is College Still Worth It? The New Calculus of Falling Returns,” may be downloaded by clicking here.