Breaking the Cycle of Racial Wealth Inequities and Higher Education Outcomes: How Data-Driven Insights Can Inform Policy Solutions That Address the Racial Wealth Gap

For decades, assessing income has served as the tried-and-true method for creating financial aid packages--scholarships, grants, and loans--for the nation's college students. Each year, students and families living with low and moderate incomes submit income documentation to colleges, states, and the federal government in hopes of qualifying for financial aid to defray college costs. But what if a student's wealth status revealed more about their ability to cover college costs than their income did? Income is an important measure, but it provides only a snapshot of the full resources available to students and their families. Wealth, too, impacts a student's access and ability to pay for college as well as their chances of graduating and turning career aspirations into a well-paying job and fulfilling life. Examining income alone masks deep and persistent inequities in wealth by race or ethnicity. This gap, which is rooted in generations of discrimination and systemic barriers to opportunity, affects the college dreams of countless people, particularly those from historically marginalized communities. Limitations in available data mean researchers and policymakers know relatively little about how wealth impacts higher education, with far more attention focused on understanding and addressing the effects of income. This paper seeks to address that missing piece by exploring the impact of wealth on students' experiences in higher education and how these experiences, in turn, influence wealth-building.