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- Black students have limited access to high school personal finance classes.
- It’s crucial for Black teens to learn about the obstacles they will face and how to address them.
- Scholarships, books, podcasts, and financial planners can all help bridge the gap.
High school personal finance courses can be extremely valuable for young people getting ready to take out student loans, find their own housing, interview for new jobs, and build their credit. However, high schools with a majority of Black students are less likely to offer a guaranteed personal finance course.
According to a report from Next Gen Personal Finance, only 23 states require students to take a semester-long personal finance course, and of those, only eight programs are fully implemented. Schools with more than 75% Black or Hispanic students offer personal finance courses half as often.
Black teens need to comprehend how discrimination has impacted the finances of Black families over generations. Now that many schools have reduced their Black history curriculum, this type of education increasingly falls on Black parents.
Black parents often discuss discrimination in general with their kids, but financial discrimination is not addressed as much, according to Tiffany Aliche, author and personal finance educator. “Every Black child has heard, ‘You’re going to have to work twice as hard just to get half as much,'” she says, but often the conversation stops there.
The topic of Black economics is extensive, but there are four fundamental concepts that are especially relevant for teenagers.
1. The student debt gap
Black borrowers are disproportionately burdened by student loan debt. Four years after graduating from college, Black borrowers have nearly double the student loan debt of their white counterparts: $52,726 on average compared to $28,006, according to Brookings. Additionally, 40% of Black borrowers encountered difficulty making federal loan payments within one year after graduation, according to The Institute for College Access & Success.
Higher education has long been promoted as a gateway to the middle class, but the racial wealth gap remains: In 2019, the median white household held 7.8 times the wealth of the typical Black household, according to Brookings.
Student debt can be overwhelming, but there are scholarships available for Black students. The NPR podcast Code Switch explains how Pell Grants have helped low-income students access higher education for 50 years. President Biden has continued to issue student loan forgiveness, and some borrowers have qualified for assistance. There’s also a growing movement in favor of full student debt cancellation as a meaningful step toward closing the racial wealth gap.
2. Housing discrimination
Securing a rental apartment can be surprisingly difficult. In numerous markets, property managers are less likely to respond to prospective Black and Latino tenants when they inquire about available rental listings, according to the National Bureau of Economic Research. Additionally, renters of color typically submit more applications, pay more in application fees, and pay higher security deposits than their white counterparts, according to a report from Zillow. The[The Fair Housing Act](https://www.justice.gov/crt/fair-housing-act-1) of 1968 prohibits discriminatory practices in housing, but they are challenging to prevent. Housing discrimination is more complex with homeownership, making it harder for Black families to attain generational wealth due to historical practices like redlining. To manage spending, especially for first-time renters, it is advised to learn how to create a realistic budget using resources like finance workbook “Made Whole.”
The racial pay gap persists, with the average Black and Latino household earning about half as much as the average white household. While employment discrimination is prohibited by the [Civil Rights Act](https://www.eeoc.gov/statutes/title-vii-civil-rights-act-1964) of 1964 and the recent [CROWN Act](https://www.thecrownact.com/) addresses hair-based discrimination, the pay gap remains a challenge to close. The [Brown Ambition](https://brownambitionpodcast.com/) podcast provides valuable insights on career-related topics and the importance of early savings for young adults to benefit from compound interest.
Credit discrimination, which goes beyond mortgages, is another issue. The Equal Credit Opportunity Act of 1974 prohibits practices like denying credit cards based on race or offering less favorable terms. Accumulating excessive credit card debt is a common pitfall for teenagers, but establishing good credit is beneficial throughout life. Seeking assistance from financial advisors, such as those from the [Association of African American Financial Advisors](https://www.aaafainc.com/), can guide young people in making informed financial choices.
It is important for teenagers to understand basic financial concepts without getting bogged down in complexity. Creating a safe space for teenagers to ask financial questions and make mistakes is crucial. Seeking help is encouraged, as financial management should not be tackled alone.
