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Publication Date

December 2009


Jess Dorrance, Mark McDaniel


Jessie Ball duPont Fund

Researchers assess the feasibility of establishing college campus programs to improve students’ financial knowledge and reduce dropouts due to financial hardships.

In the United States, a post-secondary degree is key to leading people out of poverty. But what if paying for the degree means graduating with onerous debt and a poor credit rating?

Fifty-five percent of African Americans who take on a student loan graduate with an unmanageable debt burden, a rate nearly twice that of white graduates. Add to that credit card debt, which more than one in five college students report taking on for educational expenses. And ask, what is this post-secondary degree really worth, particularly to a student of color coming from a family with limited assets and income?

The social and economic costs of student debt coupled with damaged credit scores only exacerbate the country’s racial wealth gap. Intervening at the college level, however, holds particular potential to transform an individual’s lifetime financial prospects.

The UNC Center for Community Capital examines this critical question—the worth of a college degree for minority students from low-income families—with its exploratory effort, The Reality Education and Assets Partnership: Assessing the Feasibility of On-Campus Money Management Programs at Minority-Serving Institutions in North Carolina.

REAP focuses primarily on the University of North Carolina system and its historically black institutions. It examines:

  • Student Impact—to determine if a programmatic mix of education, counseling, and support can have a significant impact on the financial management capabilities of students as wellas the dropout rate caused by financial factors.
  • Campus Sustainability—to discern how these new programs can be sustained in different institutional settings.
  • Systems Change—to inform and influence the leadership at the UNC system level,already concerned about disparate graduation rates between predominantly white and minority campuses but not attuned to the key roles that credit, financial literacy, and intergenerational debt play.

Topics(s): Debt & Credit, Economic Mobility, Financial Capability, Financial Inclusion, Financial Services Industry, Higher Education, Voices of Student Loan Borrowers