The racial wealth gap in the US is well documented. What does this mean in your school and what could it mean for your financial aid policies? According to the US Census, in 2019, the median White household had $187,300 in wealth, compared to $31,700 for the median Latino household, and $14,100 for the median Black household. Clarity’s customized methodology, unique to each school, can offer schools many ways to help address the racial wealth gap.

Here are just a few examples:

Protection of assets
Clarity uniquely allows schools to choose to “protect” a level of asset or property equity in order to remove it from consideration in the financial aid calculation. Placing a protection on home equity or savings can benefit families with smaller amounts saved, evening the playing field compared to those with generational wealth. Homeownership equity accounts for nearly half the wealth of Black and Latino families, compared to approximately one third for Asian families and just a quarter of wealth of White families, so this can make a significant difference for families who are just starting to build their savings and assets.

Eldercare costs
The Federal Reserve found that Black college graduates are significantly more likely than White college graduates to financially support their parents. Many other families do the same. By including eldercare as a monthly expense, schools can choose to consider the added expense of caring for elders into the suggested tuition calculation.

Allowing debt to be counted as a liability against assets
Black college graduates owe $7,400 more on average in student loans than White graduates, and that gap grows as the borrower gets farther from graduation because of payscale inequality and higher average interest rates for Black borrowers. Clarity’s application includes student loan payments as a monthly expense, and also gives schools the ability to count debt as a liability against a family’s assets, recognizing the limitations debt imposes on building wealth.

All of us on the Client Success team have deep experience working with independent schools that make equity and access priorities in the financial aid process. If you’d like to learn more, please reach out to your CSM!