Debt Burden on Black Families Throws College Into Question

By Alexandra Bacchus

  • Black students take on more debt for the same degree than other students

  • College-educated black families earn about $68k of lifetime net worth

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It’s no secret that the cost of college is climbing faster than American wages and the inflation rate, 8x faster, to be exact. Yet even as costs climb, the importance of earning a college degree remains. Black families typically have less wealth and fewer resources to pull from, which means they borrow more money for the same expensive degree. Specifically, college-educated white families earn about $400k of lifetime net worth, compared to $68k earned by black families with the same degree.

Why This Matters: Students of color have to focus on paying off their student debts for longer, meaning they are unable to focus on other financial goals like buying a home, paying off credit card debt, and saving for retirement. Studies show that white men have paid off 44% of their student loans twelve years out of college, while black women owe 13% more. What's more, the amount of loans that are 90 or more days delinquent has not changed much since 2012, proving that the financial burden is still high even as unemployment rates get lower, now at 6.7% for African Americans and the economy improves.

Cashing In On Racial Justice Through Index Funds

By Taylor Durham

  • OpenInvest has started to divest from organizations plagued by diversity controversies

  • By 2045, people of color will become the majority in the U.S

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OpenInvest, a fintech startup in the Bay Area is betting on impact investing, creating one of the first “racial justice” index tools, giving investors the opportunity to customize their portfolios based on metrics like diversity and social impact. Millennials are the first generation to effectively voice their concerns with their wallets, and are more likely than previous generations to take businesses to task over practices that harm the climate, deceptively target minorities, or worse.

Why This Matters: The creation of a racial justice index may finally force companies to take stock in how to become more involved in the conversation or, at the least, address their lack of action. While large pension funds factor environmental, social and corporate governance, there’s still a desire for investing aligned with social issues. “There’s no mathematical justification for 20 million people to pile into the same cookie-cutter mutual fund anymore,” according to OpenInvest co-founder Josh Levin. “We’re optimizing the financial markets, in real time, for your goals and your values.”