Is Going To College Worth It? (Yes, If You're White!)

Over the past few years, individual wealth grew for all Americans. But that doesn’t mean everybody is on level ground. HowMuch.net's graphic below shows the net worth disparity between racial groups, both with and without a college education.

Source: HowMuch.net

HowMuch.net created this graphic using new data from a Federal Reserve analysis of recent trends in consumer financing. Consumers were broken into four groups – white, black, Hispanic, and “other.” The “other” group contains everyone who isn’t white, black, or Hispanic, making it a bit of a minority melting pot.

Effect of Education on Prosperity

As you can see, education clearly impacts an individual’s net worth, but it isn’t the great equalizer that many think. Data shows that race and ethnicity still have major impacts on net worth, whether or not individuals have an education.

Consider this: a bachelor’s degree allows black and “other” Americans to experience a six-fold increase in median net worth. Hispanic wealth increases by four-and-a-half times. White wealth triples.

For minorities, this ends up being between $56,000 and $175,000.

That sounds pretty good, but it’s even better if you’re white. White graduates increase their median net worth by about $300,000 – far more than any other group.

The white advantage is so big that whites without a degree are up to 40% richer than black and Hispanic individuals who do have college degrees!

Is This Racism?

There are several possible reasons for these differences. First, minorities are more likely to be the first in their families to attend college, meaning their family networks are often less rewarding. Another reason could be that poorer students attend less prestigious schools. Of course, systemic racism could also contribute, but this data alone doesn’t prove or disprove that fact.

The bottom line is that college benefits whites more than minorities. To whites, a degree is worth up to $300,000. For blacks and Hispanics, it’s worth only about $60,000. In other words, a black or Hispanic person’s four-year degree doesn’t even pay for itself!

Sadly, this disparity isn’t much of a surprise. As we’ve shown in past visualizations, the American economy is rife with racial inequality. This graphic reveals which states have racial inequality regarding income and home ownership. (Spoiler alert: it’s every state.)

Cause for Hope?

There is some good news for minorities, however. In 2013-16, minority families increased their net worth at a faster rate than white families. The typical white family’s net worth grew by 17%, while a typical minority family’s increased by 30-50%.

Although white individuals still experienced a larger net worth increase in terms of real dollars, the rapid growth of minority wealth could indicate the future financial equality is on the horizon.

We ignored mean data for this graphic because it was so heavily influenced by the ultra-wealthy. Instead, we used the median because it more closely represents a “typical” individual.