The African American wealth gap for college graduates is widening, according to a new study. Researchers found that the median net worth of black households headed by someone with at least a bachelor’s degree declined from $13,900 in 2013 to $11,000 in 2016. The median net worth of white households headed by someone with at least a bachelor’s degree increased from $132,400 in 2013 to $134,700 in 2016. 

Black people who attended and graduated from college are experiencing an increase in financial inequality when compared with their white counterparts. This disparity can be attributed to the difference between incomes among blacks and whites as well as higher levels of debt among blacks than whites. Researchers found that these trends were even more pronounced for black women. Black households headed by someone with at least a bachelor’s degree showed a decline in their net worth of 66 percent from $23,000 to $9,100 between 2013 and 2016. Researchers compared the median net worth of black and white households headed by someone 35 years old or older who attended college but did not graduate.

This research is part of the Center for Global Policy Solutions’ Black Wealth Initiative.

The report, Understanding Racial Wealth Disparity: The Role of Education, was authored by Darrick Hamilton and William Darity Jr. from the Samuel DuBois Cook Center on Social Equity at Duke University. Going to college is not a prerequisite for building wealth. In fact, the report finds that black households with a college degree or higher have less than one-tenth the amount of wealth (10 times less) than white households headed by someone without a high school diploma. According to the Federal Reserve’s Survey of Consumer Finances from 2013:

Black households headed by someone with at least a bachelor’s degree had a median net worth of $13,900 in 2013. Meanwhile, white households headed by someone with less than a high school diploma had a median net worth of more than $458,000—10 times the wealth of black households headed by someone with at least a bachelor’s degree.

Credit and debit card debt are major factors in these disparities. The median household credit card debt among black households with a bachelor’s degree or higher was $8,600 compared to white households with less than a high school diploma and no student loan debt, which had zero balances on their credit cards. Credit card debt can lead to other problems, such as difficulty making payments; defaulting on debt; bankruptcy; and lower credit scores.

The authors argue that the racial wealth gap cannot be explained by income differences alone—it is also a function of unequal access to resources, accumulation opportunities, and returns on investments. Further, they point out that educational attainment can in some cases exacerbate the racial wealth gap rather than help narrow it, as high levels of student loan debt can create additional challenges for black households in building wealth.

The report concludes that the goal of shrinking the racial wealth gap will require a combination of economic policy interventions and oversight from policymakers to increase individuals’ access to higher education and ensure they can graduate without being saddled with insurmountable student debt.

Black college graduates are more likely than their white counterparts to have lost wealth during the recession and its aftermath, according to a new Federal Reserve Bank of St. Louis analysis. The study found that median net worth plunged from $18,359 for black college grads in 2009 to $11,000 in 2013—a drop of almost 40 percent. During the same four-year period, median net worth for white college grads fell from $230,000 to $180,000—a decline of 22 percent.

The Fed study stated that this was "the largest four-year decline in median [net worth] since the survey began in 1983." The study also found that black graduates were more likely to have a home mortgage and more debt relative to their income compared with white or Latino graduates.

The authors of the study attributed this black-white wealth gap in part to differences in homeownership, noting that nearly 20 percent of African Americans own their homes with no mortgage (compared with only 4 percent among whites). But they also noted that African Americans are more likely to take out home equity loans and lines of credit than white homeowners.

Meanwhile, the Washington Post reported last week that black families' median wealth has dropped 35 percent since 2010 to $17,100. This number is still five times as high as families earning under $25,000 have in savings or assets—a figure that is "shockingly low."

The Post cited the Fed study in noting that African Americans own homes at half the rate of whites. But it also noted another key factor: Black families in recent years have been far more likely than white families to take on high-interest, subprime loans during the housing boom and bust—a practice known as "predatory lending."

The Post added that because black families have less wealth to fall back on, they're more likely to be affected by cuts in public spending and social programs.