DiversityInc - July/August 2006

Higher Education:
Why It Matters, How You Can Prepare

Arecent study of black parents found that nearly all of them consider a college education key to future success. But a lack of information about paying for higher education has created a gap between aspiration and realization, especially for black and Latino families.

The study of black students and parents in five cities, conducted by the United Negro College Fund (UNCF)’s Patterson Institute, found that 99 percent of black families believe a college education is an important part of success in life. But almost half of the parents could not name a single source of financial aid and 70 percent of students indicated they wanted to receive financial-aid information earlier in their high-school years.

“The unfortunate effect of that gap is preventing many thousands of high-aspiring kids from those communities from going on to college because there is this perception that college is out of reach,” says Hugh Rosen, a spokesperson for The Sallie Mae Fund.

The Knowledge Gap

Part of the problem is the way information is being disseminated. It’s important to reach out to underserved communities through local organizations, from churches to grassroots groups. For example, a California program run by Wells Fargo, No. 17 on The 2006

BY T.J. DEGROAT

DiversityInc Top 50 Companies for Diversity list, arms mothers with the knowledge they need to run financial-education workshops for their peers. The classes, held in schools, churches and private homes, are informal and relaxed.

In October, on the heels of the UNCF study, The Sallie Mae Fund kicked off its campaign to improve higher-education access among black students by offering free “Paying for College” workshops in community centers and local schools.

“This work is about getting knowledge out in ways these communities would like to receive it,” Rosen says.

Sallie Mae also announced a commitment to renew its “American Dream” scholarship program with the UNCF, pledging to provide a $500,000 grant for 2006–2007 academic-year scholarships. The fund has made $2 million in scholarships available since 2003.

This work is an off-shoot of the fund’s Project Access, a program focused on providing information and opportunities to underserved populations. It was launched in response to a 2002 Harris poll commissioned by The Sallie Mae Fund, which found that families with the lowest income levels had the least amount of financial-aid information at their disposal.

Of families that earned less than $50,000 a year, about 60 percent said they needed more information about how to pay for college, compared with 37 percent of

families making $75,000 or more. People of color, in particular, are victims of a knowledge gap, according to the survey. Two-thirds of all black parents and 62 percent of Latino parents surveyed said they needed more information about paying for their children’s college education, compared with 44 percent of white parents.

Adding to the problem is the size of the country’s unbanked population. An estimated 10 percent of the U.S. population does not use the banking system. The problem affects all lower-income Americans but is most common among Latinos. Only half of the nation’s 40 million Latinos have checking accounts, according to the American Bankers Association.

In a 2005 survey of New York City Latinos, Charlotte, N.C.–based Bank of America, No. 25 on The 2006 DiversityInc Top 50 Companies for Diversity list, found that 34 percent hadn’t established a relationship with a mainstream bank.

Many of the unbanked Latinos are undocumented immigrants who can’t legally open an account. But about half of undocumented residents come from Mexico, a country that issues matricula consular cards, which can be used to open bank accounts in the United States.