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How HBCUs Are Helping Reduce the Racial Wealth Gap

How HBCUs Are Helping Reduce
the Racial Wealth Gap

Black households have a fraction of the wealth of white households, leaving them in a much more precarious financial situation when a crisis strikes, such as the pandemic. Wealth allows households to rebound from a financial emergency, invest in their children’s education, start a business, relocate for better opportunities and buy a house. Unfortunately, the wealth gap between white and black Americans has not decreased in the last 50 years. In 2019, the median wealth (without defined-benefit pensions) of Black households in the United States was $24,100, compared with $189,100 for white households. Homeownership contributing significantly to household wealth was 72% for whites compared to 42% for blacks. And the reasons for the black-white wealth gap are not a mystery. They have resulted from centuries of policies that have systematically disadvantaged Black Americans’ ability to build, maintain, and pass on wealth.

Research shows that one of the proven ways to narrow this gap is through higher education, especially for those who graduate in the STEM, legal and medical fields, which offer higher-paying career opportunities. Black professionals have relied on HBCUs more than any ot

her higher education institution for over 180 years. They graduate 80% of Black judges, 50% of Black doctors, 50% of Black lawyers, 40% of all Black US Congress members, and award 24% of all bachelor’s degrees in STEM fields. And while HBCUs have received record funding over the last two years, with more than 6.5 billion allocated by the Federal government, that doesn’t begin to make up for decades of neglect.

Our Money Matters, a free platform to help HBCU students and community residents get on the path to financial wellness, offers six reasons why minority institutions need our continued advocacy.

  1. HBCUs have a 34% mobility rate of moving their students from the bottom 40% in household income into the top 60%. That is double the national average and five times more than Ivy institutions.
  2. Endowments for HBCUs are a fraction of comparable non-HBCUs, with an average of $15,000 per student compared to $410,000. Endowments are typically used to support scholarships, facility upgrades, and faculty hiring and retention. The difference is significant if you compare Howard University, sometimes referred to as the Harvard of HBCUs, and the HBCU with the highest endowment. Harvard’s endowment is about $42 billion, while Howard’s is around $700 million—less than a 50th of Harvard’s endowment. There is not one HBCU with an endowment of over a billion dollars, while there are over 100 white institutions.
  3. The pandemic required HBCUs to shift funds to remote learning. Many students needed computers and access to Wi-Fi, and schools needed to upgrade their technology infrastructure. Also, many students require student loan debt relief as well. This meant that schools diverted crucial funds from maintenance and other infrastructure investments. Nearly two-thirds of the surveyed schools said they had more than 5 million in deferred maintenance.
  4. Private donations and grants are significant funding sources for all higher education institutions. However, it accounts for a small portion of total revenue for HBCUs compared to non-HBCUs – 17% versus 25.8%. And because much private funding comes with certain restrictions, it means less flexibility for HBCUs to address pressing needs. And when HBCUs must turn to other sources for funding, they face higher fees to borrow money than white institutions. For example, a Black minority-serving institution would have to pay underwriters $35,000 more for a $30 million bond than a white university. In addition, historically black colleges and universities in the U.S. have been underfunded for decades, with billions of dollars in state funding diverted by lawmakers for other purposes, according to higher education experts.
  5. First-generation college students make up 39% of HBCU enrollment, and many rely on student loans. While costs at HBCUs are less than at non-HBCUs, tuition is increasing universally across all institutions. This forces many Blacks to choose between a degree and the accompanying astronomical debt or forgoing college altogether. In fact, in a 2021 nationwide survey of nearly 1,300 Black borrowers conducted by the Education Trust, many questioned whether the debt they incurred was worth it. And yet, Blacks that had a degree were much better equipped to weather the pandemic than those without one.
  6. For faculty members, choosing to work at an HBCU means being unfairly penalized in terms of salary. On average, HBCU faculty earn $18,000 less than those teaching in non-HBCU institutions. HBCU faculty earn about $69,180, compared to $87,385 for faculty in non-HBCUs, making it much more challenging to recruit professors and administrators, especially in expensive cities.

HBCUs have traditionally had to do much more with less. And yet, they have positively impacted society to a far greater degree than the historically meager investments made from private and public sources. HBCUs provide an average of 6,385 jobs in each state and territory where they are located and generate an average of $704.7 million a year in total economic impact. They make up just 3% of higher education institutions in the country, but they educate 10% of all Black college students. And according to recent research, increasing the strength of HBCUs around the U.S. could increase Black worker incomes by about $10 billion, strengthening the economy with $1.2 billion in incremental business profit, additional consumer expenditures of $1 billion, and help to reduce the wealth imbalance.

In conclusion, Black History Month is important for HBCUs as it allows these institutions to celebrate the contributions and achievements of African Americans, recognize the legacy of their institutions, and provide a space for students and faculty to learn and share their perspectives.

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Turning This Moment Into a Movement

Black History Month:
Turning This Moment Into a
Movement

February is Black History Month, a time to celebrate the achievements and contributions of African Americans to American society. One of the most important institutions in this history is Historically Black Colleges and Universities (HBCUs). These institutions have played a crucial role in educating and empowering black Americans for over 150 years.

HBCUs were founded during a time when African Americans were not allowed to attend white institutions of higher education. These schools provided an opportunity for black students to receive a quality education and to become leaders in their communities. Many HBCUs have produced some of the most influential figures in black history, including Martin Luther King Jr., Oprah Winfrey, and Toni Morrison.

HBCUs have also played a vital role in shaping the African American community. They have been a beacon of hope for many students who have come from underprivileged backgrounds and have provided them with the tools and resources they need to succeed in life. HBCUs have also been a safe haven for black students who have faced discrimination and racism on predominantly white campuses.

However, despite their importance, HBCUs have been underfunded and under-resourced for decades. This has led to a decline in enrollment and a lack of support from the government. This is unacceptable and it is time for change.

We must turn this moment into a movement. We must advocate for the support and funding of HBCUs. We must ensure that these institutions are given the resources they need to continue to provide a quality education to black students. We must also raise awareness about the importance of HBCUs and the role they have played in shaping black history.

HBCUs are a vital part of black history and they continue to play a crucial role in educating and empowering black students. It is time to act and make sure that they receive the support they need to continue to do so. Let’s turn this moment into a movement and ensure that HBCUs are recognized for the valuable contributions they have made and continue to make to the African American community.

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Stay the course…

Dear Students,

As Student Success Coaches, we would like to take this opportunity to reach out and communicate with you directly. We understand that your academic journey can be challenging, but please know that we are here to support you every step of the way.

We want to remind you that your success is our top priority. We are here to provide you with guidance, resources, and support to help you achieve your academic goals. Whether you need assistance with time management, study skills, or navigating the university, we are here to help.

It is important to remember that you are not alone in this journey. For this reason we have created this entry to provide you with a direct message and to be able to contact us more directly. We hope you enjoy.

Student Success Coaches

Stay the course…

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As we still consider this year new, make this time about continuing to grow “you.” Not outcomes (or even incomes)- you. Anything you want starts with you anyway! Consider the Be-Do-Have model: who a person needs to be to accomplish the goal; what a person needs to do to accomplish the goal; what a person will have in accomplishing the goal. Truth be told, most of us function from Have-Do-Be [once I have, I’ll do, then be] or Do-Have-Be [the more I do, the more I’ll have, the better I’ll be] models, oftentimes setting ourselves up to live passively and with reliance on external factors out of our control. But we are not bystanders in and of our lives!

When we start with be-coming the person we need to be, we acknowledge our power. With this model we renew our thinking, our will, and our emotions (be), to walk in the fullness of a blueprint (do) designed with fruitful expectation (have). And as we reciprocally engage our works and our faith, we magnetically influence the world around us to meet our needs. So no matter when, make time and review your plans now to ensure that they start with you living as the best version of yourself for the life you desire and deserve. Because regardless of what you may think, you are the most powerful model for your life. So become the leader that you want to follow- from there is where it all flows. Are you with me?

Dr. Jaché Williams

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