EQUAL OPPORTUNITY? NOT REALLY
Hey <<First Name>>,
Last Sunday, in the greatest act of generosity we’ve seen in ages, billionaire Robert F. Smith announced during his commencement speech at Morehouse College, that he will pay the student debt for the entire 2019 graduating class. Mr. Smith had become increasingly concerned in recent years about the degree to which students leave college saddled with heavy debts, including many at Morehouse. The generosity of Mr. Smith, the richest black man in America, highlighted the systematic problems of wealth creation in America.
Historically black colleges and universities (HBCU’s) helped lift generations of African-Americans to economic security. Now, attendance has become a financial drag on many of their young graduates; members of a new generation hit particularly hard by the student-debt crisis. Students attending HBCU's like Morehouse are also more likely to take out loans compared with other students, in part because of the racial wealth gap.
According to a Wall Street Journal analysis of Education Department data, students of these institutions are leaving with disproportionately high loans compared with their peers at other schools and are less likely to repay those loans than they were a decade ago,
Among the Journal's key findings, HBCU alumni have a median federal-debt load of about $29,000 at graduation—32% above graduates of other four-year schools.
Also, America’s 82 four-year HBCUs make up 5% of four-year institutions, but more than 50% of the 100 schools with the lowest three-year student-loan repayment rates.
Tuition increases have outstripped inflation across America. Black families have the least wealth of the largest U.S. racial groups. Parents of black college students have lower incomes and are less likely to own homes than those from other racial groups, Education Department data show.
Meanwhile, in Silicon Valley, the number of new tech millionaires being minted by the wave of IPO’s this year is astounding. What sets this IPO season apart from previous offerings is the sheer volume of thousands of workers expected to benefit from the boom and its impact on the Bay Area. There are more American billionaires than ever before, and Silicon Valley is their home turf. One out of every 11,600 people in San Francisco is a billionaire. The ten-year tech job boom has also helped fuel more robust income levels, albeit fewer than 3% of the Silicon Valley workforce is African American.
The significant wealth gap in our society is being fueled by the technology industry. Tech companies, for their part, often point to the “pipeline” problem. That is, firms would love to hire more people of color, if only there were enough qualified candidates. The numbers though, don’t quite add up. In 2014 to 2015, black students earning a bachelor’s degree in science, technology, engineering, and mathematics accounted for 7.1% of graduates in those fields, according to the Department of Education. Yet in Silicon Valley, black employees made up less than half that.
Over the generations, the effect of this lack of inclusion has compounded, leading us to the disparities that exist today. Thank you, Mr. Smith, for opening the door, now it’s time for us to work on keeping it open!