How Educational Inequality Contributes to Financial Insecurity

When schools and colleges don’t provide equal opportunities, we’ll spend “to the brink of what we can afford” to get the best education possible.

Last month, Ester Bloom wrote about the idea that many Americans don’t have enough cash reserves to cover a $400 emergency, and referenced Neal Gabler’s recent Atlantic essay, “The Secret Shame of Middle-Class Americans.”

The Secret Shame of Middle-Class Americans Living Paycheck to Paycheck

Gabler’s confessional essay prompted what feels like as many reactions (and reactions to the reactions) as talia jane’s “An Open Letter to My CEO,” and I suspect that’s because Gabler and Talia Jane are sharing two different variations on what is an overwhelmingly common story: I may have made a few financial mistakes, but I also made a lot of smart financial choices. How did I end up here, and is it really my fault—or is there something else going on?

The Atlantic is now running a series titled True Money Stories which explores that very question: is it really “our fault” that we’re constantly broke or in debt, or is there something else going on?

I encourage you to read the entire series, especially the financial stories sent in from Atlantic readers, but I want to focus on just one quote from Atlantic senior editor Rebecca J. Rosen in her article “The Circles of American Financial Hell:”

The Circles of American Financial Hell

It’s all too clear why parents will spend down their last dollar (and their last borrowed dollar) on their kids’ education: In a society with dramatic income inequality and dramatic educational inequality, the cost of missing out on the best society has to offer (or, really, at the individual scale, the best any person can afford) is unfathomable. So parents spend at the brink of what they can afford. By contrast, non-parents are far more likely to actually build up savings. (In cases where parents do manage to find affordable housing in a district with good-quality schools, it can make all the difference.)

It’s possible to imagine a country where the schools are good everywhere and prosperity is widespread. In such a country, parents don’t pour their resources into maximizing their kids’ educational quality, because their kids will have basically the same outcome anywhere. That’s not the country America is.

So. Families spend “at the brink of what they can afford” to get their children into the best possible schools, and then those children take out tens to hundreds of thousands of dollars in student loans so they can go to the best possible college.

It’s astonishing, really, that this is where we are as a culture. We are so aware of the importance of education—and its tenuous but real connection to the “good job”—that we are willing to spend everything we have (and everything we don’t have yet) to get the best education we can. More importantly, we know that educational opportunities at various schools are so unequal that spending this money matters.

This isn’t the only reason why so many of us are in debt or are unable to come up with $400 (hello, healthcare and housing costs), and certainly “rising education costs contribute to financial stress” isn’t a new discovery, but I hadn’t seen anyone put it quite as bluntly as Rosen did: This isn’t just a public vs. private school thing, or a state college vs. private college thing. A lot of people spend “at the brink of what they can afford,” whatever that means to them, and that leaves all of us broke at the end of the month.

What do you think about “The Circles of American Financial Hell?” Do you agree?

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