By Takiyah Noble
Koindanomics Magazine Disclaimer About Pursuing Higher Education:
Before we get started with this article, we need to make a point perfectly clear. This article is not to discourage Blacks from pursuing higher education. In fact, we encourage and endorse Blacks to pursue higher education because people with college degrees make more money at every point in their career than people who do not have college degrees. Our official stance at Koindanomics Magazine is that Blacks should pursue higher education, just not in any country where it is cost-prohibitive to achieve higher education.
For our readers who argue that traditional schooling is not for them and advocate getting trades instead, we encourage you to read the article called “Understanding Class in America” to determine your likelihood of making money within a trade. The decision-making framework shared in the “Understanding Class in America” article is based on fifty years of empirical data and research from traditional economists and social economists. It’s beyond accurate. We encourage you to use the framework to make decisions about career choices rather than listening to personal opinions about what career choices are good and not.
A myth exists that higher education will increase the wealth potential of Blacks in the United States. As mentioned before, since individuals who have college degrees earn more at every point in their career than people who do not have them, it would be safe to assume that higher education would lead to higher incomes that closes the wealth gap, right? Wrong. At every level of educational attainment, Blacks still had lower levels of wealth than their white counterparts.
This is a prime example of the detrimental “Black Tax Theory” that parents pass on to Black children about the realities of their world. Black children must work twice as hard to get half as far. Studies absolutely show that:
- Black college educated heads-of-households had less wealth than white heads-of-households with only a high school diploma.
- Blacks were required to have a college education to have comparable wealth to whites with no college education or minimal college education (an associate’s degree).
- When Blacks were college educated with either a bachelor’s degree, master’s degree, and/or doctorate degree, whites with the same level of college education had three times the amount of wealth as their Black counterparts.
Student loan debt burden has increased in all racial groups, but Black women have been affected the most. According to the American Association of University Women, Black women graduate with the most debt, which is $30,400 on average. Compare this to the average student loan debt of white women, at $22,000 on average, and only $19,500, on average, for white men. When you combine the highest amount of student loan debt burden and the least amount of pay, it’s easy to see how the pursuit of higher education can create less-than-ideal circumstances for financial stability and upward mobility.
Given how exorbitant the cost of higher education has become, let’s take a look at what the earning power is of a student who achieves only a high school diploma. Coming out of high school, the EPI (Economic Policy Institute) found that Black workers face an 11.1 percent pay penalty compared to their white peers. The average wage for the following demographics is:
- Black high school graduates make $10.92/hour
- Asian and American Pacific Islander high school graduates make $12.08/hour
- White high school graduates make $12.29/hour
- Latino high school graduates make $12.33/hour
Did you notice that Blacks don’t even make $11/hour, but every other racial group starts at $12?
It gets worse if you’re a female. The EPI also found that female workers face a 10.2% pay penalty compared to their male counterparts. From this information, we learn that the highest paid high school graduate in the United States of America is a Latino male and the lowest paid high school graduate in the United States of America is Black female. After high school, according to the data by the Bureau of Labor Statistics as of the last quarter of 2018, white and Asian workers made more than 30% more than the typical Black and Latino worker.
What’s the Solution?
Attend college overseas, rather than just community college.
You’re probably thinking that it’s too expensive to do that. We want to reassure you; it’s not. You have been duped by marketing. Don’t believe lies that only the rich can afford to travel. There are sites and apps that can show you how to fly to anywhere in the world for less than $200. In fact, it is more expensive for you to fly from state to state in the United States than it is for you to fly country to country when you are outside of the United States. If you are worried about being able to afford the cost of a flight out of the United States, one of our recommended resources is a Black-owned company that will allow you to make installment payments on plane tickets to get overseas. Best of all, they don’t run your credit or charge interest. As of the time of this writing, they charge only a service fee.
It’s also important that you understand an economic concept called Purchasing Power Parity. It states that the cost of goods in one country will cost the same amount of money in another country once the currency exchange rate is applied; however, your home country’s currency may be more valuable than the currency of the new country where you are trying to live. If you live in a place where your home country’s currency is more valuable than the currency of the foreign country’s currency, then your money will stretch further. You literally could be living for a fraction of the cost of what it takes for you to live in your home country. We will share a few tools that you can use to figure out how much it costs to live in any area of the United States and then do a price comparison between the cost of living for that city and state and any other city or country in the rest of the world.
When Blacks in the United States pursue a low-cost degree internationally in one of the fields that economists have classified as “Economic Class Jumpers,” students can get a high-quality education for pennies on the dollar and potentially make a five-figure or six-figure income after graduating college rather than owing five-figure or six-figure debt to obtain a degree. Furthermore, obtaining higher education overseas sets the foundation for Blacks to be global, industrious citizens and engage in business internationally. The best part is that Blacks are not subjected to the race-based wage penalties that are rampant throughout the United States of America. And with international tax codes like the Foreign Earned Income Exclusion, which allows any American to legally earn up to $100,000 tax free if they live and work overseas, students can rapidly create wealth.
Seventy percent of all business activity happens outside of the United States of America. Too many international schools offer low-cost or no-cost tuition and over 700 of those international schools will accept federal student aid as payment for tuition if a Black student is income sensitive. If you fill out a FAFSA form and qualify for Pell Grants, Federal Loans, etc., you can use that money to pay for an entire undergraduate or graduate degree outside of the United States.
Here’s How You Can Get Started:
- Read our article called “Understanding Class in America” and use the framework to determine a career that will be lucrative.
- Go to the Department of Education’s Student Aid – International Schools List. It can be found at https://studentaid.ed.gov/sa/types/international.
- Scroll down the page to the link that reads “International Schools That Participate in Federal Student Loan Programs.”
- Download the spreadsheet and look at schools that interest you.
- If you are pursuing a bachelor’s degree, visit Bachelor’s Portal at https://www.bachelorsportal.com/ or Go Abroad’s Degree Abroad Site at https://www.goabroad.com/degree-abroad.
- If you are pursuing a master’s degree, then go to Master’s Portal at https://www.mastersportal.com/ or Go Abroad’s Degree Abroad Site at https://www.goabroad.com/degree-abroad.
- If you are pursuing a doctorate degree, then go to PhD Portal at https://www.phdportal.com/ or Go Abroad’s Degree Abroad Site at https://www.goabroad.com/degree-abroad.
- Calculate your cost of living using the EPI Family Budget’s Calculator at https://www.epi.org/resources/budget/.
- Compare that to your cost of living overseas by using Expatistan’s database at https://www.expatistan.com/cost-of-living.
- Once you decide, then go to the school’s website to see what their requirements are for enrolling in their school. You will definitely need to get a visa.
In future articles, we will explain how to navigate visas, other options for second residencies, and even second passports. This allows you to pursue higher education, live overseas, do business overseas, and invest overseas for better returns. In fact, some of the safest investment returns are from overseas assets outside of the stock market.