The Effect of Wealth Inequality on Higher Education Outcomes: A Critical Review

Abstract

American society reflects considerable class immobility, much of which may be explained by the wide gaps in college completion rates between economically advantaged and disadvantaged groups of students. First, we discuss the factors that lead to unequal college completion rates and introduce assets as an explanation often ignored by stratification scholars. We then discuss how a legacy of wealth inequality has led to wealthy students having an advantage at the financial aid bargaining table over low-income and minority students. We conclude by discussing how asset-building policies such as children’s savings accounts offer a potential policy strategy to alter the distributional consequences of the current financial aid system and help level the playing field.