Wealth, Race, and Under-Addressed Financial Need in Federal Student Aid Policy

• In Event: Funding Futures: Unpacking the Complexities and Limitations of Financial Aid and Philanthropy

Abstract

Federal student aid formulas prioritize income over wealth. Using nationally representative data from two cohorts, we make two core arguments: first, federal student aid policy under-addresses wealth-driven financial need, and second, this under-addressing contributes to racial disparities in student debt, in turn reinforcing the United States's longstanding racial wealth stratification. We expand on the theoretical concept of "the racialization of state policy" by presenting this empirical example in the domain of federal student aid policy. The results thus highlight higher education’s centrality as a social institution in which seemingly race-neutral policies may nonetheless reinforce racial stratification. Hence, the findings illustrate Kimberlé Crenshaw’s argument that formally color-evasive policies often nonetheless reflect white conditions and implicitly perpetuate racial inequities.

Authors

• Christian Michael Smith, University of Georgia

• Laura Hamilton, University of California - Merced

• Charlie Eaton, University of California - Merced