Global Journal of Management and Business Research, B: Economics and Commerce, Volume 22 Issue 4

3 Global Journal of Management and Business Research Volume XXII Issue IV Version I Year 2022 ( ) B © 2022 Global Journals Racial and Community Wealth Disparity the Bane of HBCUs: A Wealth Ecology Model Relational Perspective To overcome the increasing cost of education, declining sources of financial aid (grant, scholarship, etc.) and school funding, students have had to rely more on private and public loans and family support. With African American communities mostly suffering from racial wealth disparities (Wolff, 2017; Herring & Henderson, 2016, Robb & Fairlie, 2007; Cavalluzzo & Wolken, 2005), the availability of family support becomes the most supportive and differential determinant that influences college enrollment. This is assuming financial aid and public funding are available to all students and based on achievement, should be the same opportunity to all incoming students without potential racialized differential. Most African Americans have negligible impact from inheritance (Herring & Henderson, 2016; Robb & Fairlie, 2007) and therefore depend mostly on acquired wealth from immediate and close family circles. The average wealth stocks of all members of a community can be effectively used as a determinant of the wealth status of a community as far as that measure constitute majority of the wealth builders, drivers or indicators. A study by Herring and Henderson (2016) finds Stock ownership, inheritance, Income, business ownership, home ownership, college level education, and retirement asset investments are the highest wealth indicators and creators. Additionally, social and community-based wealth improvement initiatives identify human, intellectual, social, cultural, and environmental capital as sources of wealth (Lumpkin & Bacq, 2019). Any measure that includes a sizable proportion of the above indicators should provide an effective proxy for a community’s wealth. Here, the wealth concept by Wollf (2017) is used. Defining … “wealth (or net worth) … as the current value of all marketable or fungible assets less the current value of debts. Where total assets are defined as the sum of: (1) the gross value of owner-occupied housing; (2) other real estate owned; (3) cash and demand deposits; (4) time and savings deposits, certificates of deposit, and money market accounts; (5) government bonds, corporate bonds, foreign bonds, and other financial securities; (6) the cash surrender value of life insurance plans; (7) the value of defined contribution (DC) pension plans, including IRAs, Keogh, and 401(k) plans; (8) corporate stock and mutual funds; (9) net equity in unincorporated businesses; and (10) equity in trust funds. Total liabilities are the sum of: (1) mortgage debt, (2) consumer debt, including auto loans, and (3) other debt such as educational loans. This measure reflects wealth as a store of value and therefore a source of potential consumption (2017, p.6). The student wealth status is measured using the median household net worth of HBCU students. This is that represented by their racial group annual median. This data is compiled by the Survey of Consumer Finance (SCF) sponsored by the US Federal Reserve. c) HBCUs and School Choice HBCUs’ challenges seem to be reflective of the fortunes of the core communities they serve - African Americans and minorities. HBCUs have, shouldered systematic equity challenges financially and academically for decades. Founded as a place for African Americans to be educated, HBCUs have experienced growth and recognition as institutions and expanded their research and degree offerings. The advancement of these institutions has transformed the lives of many African Americans, but they continue to face challenges academically and financially. External systemic and structural influences and barriers as afore discussed, student loan crisis, dwindling grant funding, and federal budget cuts have contributed to the lack of resources at HBCUs (Kim & Conrad, 2019, Wilson, 2007). Internal barriers, including rising cost of college education, low achievement of incoming students ((Maxey et al. 1995; Kim & Conrad, 2019), low alumni giving, and low-income students seem to have impacted. School choice is discussed to be reliant on several factors categorized into behavioral, econometric and sociological (Pitre et al., 2006). An expanded model of categories includes personal and parental effects, economic effects, academic effects and social effects (Dial, 2014). Pegini and Staffolani (2015) finds that cost and geographical dispersion are critical to disadvantaged students but at the same time, high quality institutions attract talented students irrespective of their wealth status. That is, student achievement is the determinant without mentioning that achievement at the pre-entry levels may be determined by quality of the learning environment that may depend heavily on availability of funding and the wealth of the student community. Most traditional school choice models focus on the student characteristics as input for understanding student choice (Hossler et al., 1999). An earlier model by Hossler and Gallagher (1987, as cited in Hossler et al., 1999) has the broad components of the school choice process stages as predisposition, search and the choice decisioning. Pitre et al. (2006) using the theory of reasoned action provided an enhanced model with additional behavioral concepts. They laid out the broad components of the school choice process as student attitude, subjective norms (beliefs and influences of significant others), and the student-college perceptive behaviors that shape the decision process. Thus, the choice process is not only shaped by student characteristics like achievement scores but also by student predisposition behaviors such as personal assessment of ability to afford (wealth status, cost, etc.), perception of readiness for college, the perception of others within their circle of influence and control, etc. Pitre et al. (2006) further indicate other studies that show that African American students have an intention to